Pessimistic outlook inhibits Northern Europe rebar market

Low consumption levels and a wait-and-see attitude among buyers resulted in prices widening downwards in the Northern European rebar market in the week ending Wednesday November 16.
While some market participants forecast demand improving in 2023, other sources said they expect it to fall while the local economy constricts further amid a worsening recession.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe was €785-830 ($814-860) per tonne on Wednesday down by €20 per tonne from €785-850 per tonne last week.

Weak demand and minimal trading activity pressured prices downward in the Northern European rebar market.

Mills are not disclosing prices unless buyers are actively in the market to restock – a bid to resist pressuring prices lower still, sources said.

“Overall demand is very slow, and sentiment is very subdued. We believe customers must start buying at some point though we don’t know when this will be,” one producer source said.

“Prices are under pressure again. There are relatively few transactions occurring, so it is difficult to measure the real achievable price,” another trader source said. “Mills are hesitant about putting out numbers especially if you are not willing to buy to avoid consistent pressuring prices downwards.”

One trader source in the region forecast the construction industry to grow by 1.5% in 2023 based on applications already approved and projects that are due to begin soon.

“The residential construction sector is expanding due to the need for more housing. Civil engineering is increasing, and the non-residential sector is also robust,” the source said. “I don’t know where all the pessimism is coming from.”

But he conceded that there were many variables that could affect the health of construction industry next year, including exchange rates, interest rates and geopolitical tensions.

International scrap prices affect the price of all long steel products. Scrap prices have been relatively stable through October and early November.

Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was $334.00 per tonne on November 16, down from $338.71 per tonne last week.

Published by: India-Inés Levy