Polish domestic rebar prices down on weaker demand, wire rod steady

Polish domestic prices for steel rebar decreased while prices for wire rod remained stable in the week to Friday October 20, industry sources told Fastmarkets.
Demand for both products was rather slow during the assessment week. But some market participants were optimistic about the future after the country’s parliamentary elections, hoping that the new pro-Europe ruling majority would give boosts to more infrastructure projects.

Last week, mills were offering rebar at prices in the range of 2,800-2,850 zloty ($665-676) per tonne CPT, which would net back to about 2,780-2,820 zloty per tonne ex-works, buyer and consumer sources told Fastmarkets.

Similar figures were shared by another distributor source, who estimated mills’ offers in the range of 2,830-2,850 Polish zloty per tonne CPT, which would net back to 2,810-2,820 zloty per tonne ex-works.

But workable prices for rebar were about 2,800 zloty per tonne CPT, which would net back to 2,780 zloty per tonne ex-works, according to the majority of sources.

Deals have been concluded at even lower prices, however, albeit for large quantities. Notably, during the assessment week, a transaction for around 1,000 tonnes of rebar was reported at 2,750 zloty per tonne CPT, which would net back to 2,730 zloty per tonne ex-works.

In the secondary market, rebar prices were reported around 2,820-2,830 zloty per tonne CPT. Distributors were compelled to reduce their offers from 2,850 zloty per tonne CPT, reported last week, because such prices turned out to be unsustainable.

“Traders stopped buying because they had purchased enough, and although construction projects slowly started to pick up, soon they will be frozen [to a standstill] because of the winter season,” a distributor source told Fastmarkets.

Similar concerns were shared by another buyer source. “The main concern is that demand is too weak already,” this source said. “And it usually slows down in the fourth quarter of the year due to the winter cold.”

Consequently, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, exw Poland, was 2,730-2,810 zloty per tonne on October 20, down by 20-50 zloty per tonne from 2,780-2,830 zloty per tonne the week before.

Some market participants were optimistic about the future after the recent parliamentary elections in Poland. Three opposition parties that promised to restore democratic standards in the country together won more than 54% of the votes. This put them in a position to form a coalition majority.

“If the Polish government becomes democratic again, there are chances that the country will benefit soon from EU funds. This will give a boost to many infrastructure projects, of which there are very few now,” a distributor source told Fastmarkets.

The first positive effects from the elections were already obvious, according to another consumer source, because the Polish zloty was becoming stronger.

According to online currency converter Oanda.com, on October 23, the Polish currency was trading at 4.46 zloty to €1, and 4.21 zloty to $1. On October 16, when the first exit polls were announced from the election, it was 4.53 zloty to €1, and 4.31 zloty to $1.

In comparison, on September 25, it was trading at 4.61 zloty to €1 and 4.33 zloty to $1.

“The Polish zloty is getting stronger, and this means that imports will become more competitive,” a consumer source told Fastmarkets. He was also optimistic about the development of the construction sector, saying that some residential projects have started.

Wire rod
Polish mills offered wire rod about 3,000-3,100 zloty per tonne CPT in the week to October 20, sources told Fastmarkets. But the market would not accept prices of more than 3,000 zloty per tonne CPT.

The workable price varied in the range of 2,800-2,900 Polish zloty per tonne CPT, according to the market sources.

Deals for small and medium tonnages were reported around 2,850 zloty per tonne CPT during the week.

But demand was still comparatively low. “It is a ‘dead’ season now,” a distributor source told Fastmarkets. “Customers have purchased the quantities they needed for October, and are waiting for November offers. Demand is a little bit better, but I do not see any restocking, and [construction sector] activity is still weak.”

Fastmarkets’ weekly price assessment for steel wire rod (drawing quality), domestic, delivered Poland, was 2,800-2,900 zloty per tonne on October 20, unchanged from the previous week.

In the import sector, overseas wire rod suppliers to Poland also attempted to push up their prices. According to a distributor source, all mills wanted to increase their prices to at least €610 per tonne CPT for mesh-quality wire rod.

A deal for “a few hundred tonnes” of mesh-quality wire rod from Ukraine was reported at €575 per tonne DAP during the week to Friday, however.

Offers of similar material from Moldova were heard at €615 per tonne CPT.