Northern European rod prices continue to increase rapidly

Northern European wire rod prices continue to increase this week due to new purchases and amid higher energy costs in Europe. Most sources say there are new orders from customers, who are restocking.

“The market is very good, people are buying and prices are rising,” a buyer from the Netherlands tells Kallanish. “Prices for mesh have increased by €50-60/tonne [$50-60/t] and steel mills continue to purchase new volumes. Prices will probably soon reach €1,000/t.”

Domestic transaction prices for drawing-quality wire rod are at €940/t ($937/t) ex-works and mesh is at €950/t, sources say.

Producers are asking for €960/t ex-works, on average, for mesh-quality rod.

“Customers have waited and waited to see how the market will react after the summer holidays, and now the moment to buy is there because most steel mills have to purchase new volumes,” another merchant notes. “However, the issue with the high energy costs persists and some plants will have to probably temporarily stop production. And some smaller plants in Europe already did.”

According to him, the extremely low river water levels in Germany and other parts of Europe continue to impact raw materials deliveries and will influence prices.

Scrap prices are also slowly climbing again and not expected to drop soon – this will also put pressure on the market, he adds.

Scrap values in Germany increased slightly, taking old thick scrap sort 3 to €350/t, while the price for new scrap sort 2/8 was at €360/t. In Austria, scrap prices are also up: old thick scrap sort 3 is at €350/t and new scrap sort 2/8 at €365/t.

In Italy, wire rod producers are also expected to increase prices by €100/t compared to August levels, reaching €1,000/t for drawing-quality material (see separate story).

Most northern European wire rod market participants expect prices will continue to increase in the next few weeks due to restocking.

Svetoslav Abrossimov Bulgaria