Panic purchases harm German construction, stockist warns

The current rush on the German construction market to secure rebar volumes is likely to aggravate shortages and fuel price hikes even further, a German stockholder and bending firm warns.

In a letter to its customers, the company recommends to make bookings far in advance, but only to the extent needed for projected production. It warns of speculation, and recommends to make deals only on the basis of current purchasing prices.

The company normally informs its customers several times per month, but hesitated to do so in the course of May “because it would have meant ongoing news of shortage and price increases. This would have led to more panic buying, and stressed the tension on the market”, Kallanish reads in the letter. The firm compares the buying attitude with last year’s panic purchases for toilet paper during the first wave of Covid-19.

Rebar base prices from German mills have recently reached a peak of €550/tonne ($669), translating to a delivered price of €815. The construction industry’s main association, Hauptverband der Deutschen Bauindustrie, attributes the increase of steel prices to the overall high utilisation of mills due to higher activity at preferred customer groups like automotive and mechanical engineering. This argument, however, does not explain the surge in rebar prices, a product made by mills exclusively for construction purposes.

Christian Koehl Germany