Prices continued to fall in the Southern European market for steel rebar in the week to Wednesday October 12 on weak end-user consumption.
Although mills were offering discounts, customers remained in wait-and-see mode.
Persistently weak consumption by the construction industry, combined with uncertainty regarding the future price direction, resulted in a static market for rebar in Italy, Fastmarkets heard.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, exw Italy, was €895-955 ($869-927) per tonne on Wednesday, down by €5-20 per tonne from €900-975 per tonne last week.
While some sources predicted that prices would remain flat through October, others forecast further declines.
“The price of rebar is constantly decreasing,” one buyer source said. “Demand remains low and customers wait for further decreases before putting in significant orders. I do not forecast that demand will improve this month but it is impossible to predict what will happen in the future.”
“It is almost impossible to make a prediction,” another buyer source in the region said. “The market is very quiet in Italy, and there is a lot of skepticism regarding price direction.”
The Italian government has pledged support to help mills survive high energy costs but until the country’s newly elected administration is settled, it was unlikely that any changes would be implemented, Fastmarkets heard.
“The Italian government has issued a decree [that it will] contribute… financial aid to Italian companies to support them with their energy costs,” one producer source in Italy said. “Italian companies will receive 15-40% of the [cost of] energy in the form of a tax credit.”
Sources remained optimistic about the government’s support for the steel sector, but this was not yet a reality.
Prices have dropped further in the Spanish rebar market amid weak trading activity, Fastmarkets heard.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Spain, was €800-850 per tonne on Wednesday, down by €20-50 per tonne from €850-870 per tonne last week.
“Demand is weak and there is low demand from the construction industry, which further drags on prices,” one producer source said. “There is a lack of projects, due to high interest rates.”
International scrap prices affect the prices of all long steel products, and scrap prices have stabilized so far in October.
Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was $362.41 per tonne on October 12, compared with $365.38 per tonne a week earlier.
Published by: India-Inés Levy