Northern Europe rebar price yet to respond to significant scrap gains, wire rod edges up

Long steel product prices in the Northern European domestic market have yet to fully react to the significant increases in scrap prices, sources told Fastmarkets on Wednesday March 22.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe was unchanged at €710-740 ($763-795) per tonne on Wednesday.

Steel scrap prices in Germany increased by €20-30 per tonne month on month for March, depending on the grade, and mills have begun to raise their offers accordingly, by around €20 per tonne.

Sources said that few buyers had accepted higher prices and the market was accordingly slow, with buyers instead waiting to see how the market develops.

While scrap prices in Germany are generally fixed for the month, Turkish deep-sea cargo prices have stopped rising and have actually retreated slightly from the peak reached on March 13.

In response, rebar buyers are being cautious about building inventories and could operate on a hand-to-mouth basis in case scrap prices – and, therefore, rebar prices – fall in April, sources said.

“There’s not much demand right now, which I think is down to a lack of confidence [on the price direction]. Even some sellers who specialize in smaller lorry-loads are trying to encourage the idea that prices will decrease, which, of course, favors smaller purchases,” one producer said.

Construction activity usually begins to increase around this time of year, so demand for rebar should start to ramp up, sources said.

In the wire rod market, one buyer said that it had purchased a significant quantity at €730 per tonne delivered.

An exporter from Southern Europe said that sales into Northern Europe had been slow because some buyers are clinging to recent prices levels for material imported from Southeast Asia, but one deal was reported as selling at €680-690 per tonne delivered, although that price is no longer available.

“Wire rod is more difficult [to sell than rebar]; there’s lower demand and [lower] price expectations,” the exporter said. “There were lots of imports from Southeast Asia and buyers got used to that price. Now it’s proving difficult to make people understand that prices have increased.”

Nevertheless, the wire rod price increased to reflect the deal seen in the week to Wednesday.

Fastmarkets’ weekly price assessment for steel wire rod (mesh quality) domestic, delivered Northern Europe was €710-730 per tonne, up by €10 per tonne week on week.

Fastmarkets’ daily calculation of the index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey was $459.26 per tonne on March 22, unchanged week on week.

Fastmarkets’ monthly price assessment for steel scrap E3, old thick steel scrap, domestic, delivered mill Germany, was €400-410 ($428-439) per tonne on March 20, up by €20-25 per tonne from €380-385 per tonne on February 13.

Published by: Ross Yeo