Polish domestic rebar, wire rod prices flatten on subdued trading

Polish domestic prices for steel rebar and wire rod have remained largely stable over the week to Friday October 27 amid slow trading activity, market sources have told Fastmarkets.

Attempts by local mills to achieve higher prices were not widely accepted by buyers, and demand for both productshas remained low. Most market participants have decided to wait for new offers to be published in November before making purchasing decisions.

Polish mills were offering rebar at 2,800-2,840 Polish zloty ($661-671) per tonne delivered in the week to October 27, a consumer source told Fastmarkets. This would net back to 2,780-2,810 zloty per tonne ex-works.

Market sources reported even lower offers from some Polish mills, in the range of 2,725-2,737 zloty per tonne ex-works. But deals were heard at 2,820 zloty per tonne delivered during the assessment week, which would net back to 2,800 zloty per tonne ex-works.

As a result, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, exw Poland, was 2,725-2,810 zloty per tonne, widening downward slightly from last week’s assessment at 2,730-2,810 zloty per tonne.

The market remained comparatively quiet during the assessment week. Demand from the construction sector, which is the major consumer of rebar, was still soft. After some restocking in the first weeks of October, market participants were waiting to see the new offers for November.

Most buyers were waiting because steel scrap prices were decreasing. In Poland, most new contracts for scrap are signed by the tenth day of each month. This period will be crucial to understanding the direction that rebar prices will take, a consumer source told Fastmarkets.

This week, prices in the secondary market were 2,780-2,800 zloty per tonne CPT.

More import prices for rebar were in the range of €615-630 ($649-665) per tonne CPT, market sources said. Imports were not particularly attractive, given recent currency exchange rates.

According to online currency converter Oanda.com, the Polish currency was trading at 4.234 zloty to $1 on October 27. A week earlier, it was trading at 4.219 zloty to $1.

Expectations of short-term price developments were mixed.

A distributor source forecast that prices would decrease further in November, when one of the leading local producers would be back in the market after a maintenance stoppage.

According to the same source, prices from the Polish mills would decrease to 2,680-2,700 zloty per tonne CPT next month. And the expected price in the secondary market would be 2,720-2,750 zloty per tonne CPT.

“There will not be enough demand to hold prices up around 2,800 zloty per tonne CPT,” the source said.

Other market participants were more optimistic, however. According to a consumer source, the situation in the construction sector was not particularly bad. “If the winter is mild, this would support demand from construction. Besides, the current prices for rebar are too low,” the source said.

Another producer source also said that mills would continue to try to push prices upward because of high production costs.

Wire rod
The wire rod market was also quiet this week. Market participants estimated the workable prices between 2,800 and 2,900 zloty per tonne CPT. But no major deals were heard.

“Customers are waiting for the offers in November. It is a ‘dead season’ now,” a distributor source told Fastmarkets. The same source added that price increases in November might be inevitable, due to rising costs at mills.

Fastmarkets’ weekly price assessment for steel wire rod (drawing quality), domestic, delivered Poland, was 2,800-2,900 zloty per tonne on October 27, unchanged for the past month.

Two other producer sources in Europe shared the view that an increase in wire rod prices was necessary. According to them, the price should be at least 3,000 zloty per tonne CPT to cover the increasing production costs.

Offers of imported wire rod, mesh quality, from Italy, were heard at €615-620 per tonne CPT, while mesh quality wire rod of Ukrainian origin was offered to Poland at €620 per tonne DDP.

Published by: Julia BolotovaDarina Kahramanova