Polish mills increase rebar prices to cover higher production costs

Polish mills increased their prices for reinforcing bar, while the price for wire rod remained unchanged in the week to Friday January 12, sources told Fastmarkets.

According to sources, rebar prices in Poland increased due to higher production costs, including rising feedstock prices, combined with slow demand, which put pressure on Polish mills’ profit margins.

Polish mills offered rebar in the range of 2,850-2,900 zloty ($719-732) per tonne CPT, which nets back to about 2,830-2,870 zloty per tonne ex-works, sources told Fastmarkets.

In comparison, before the Christmas and New Year’s break, offers for rebar were heard in the range of 2,820-2,840 zloty per tonne CPT, which nets back to about 2,800-2,810 zloty per tonne ex-works.

This is an increase of 30-60 zloty per tonne compared with the end of December.

“The mills now call for an additional 50 zloty per tonne,” a consumer source told Fastmarkets.

Some deals were heard concluded at the higher prices, but the traded quantities were not specified.

A buyer source estimated the tradable market level at 2,850 zloty per tonne CPT, which nets back to about 2,830 zloty per tonne ex-works.

According to a producer source, the current offer price range for rebar is achievable.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, exw Poland was 2,830-2,870 zloty per tonne on Friday, increasing by 50 zloty per tonne from 2,780-2,820 zloty per tonne on January 5.

Market participants had mixed expectations about the future development of rebar prices.

“Many distributors still have cheap stock bought in the past. If the mills do not see enough demand, they can decrease their prices again. But [this couldn’t happen] sooner than the end of January,” a distributor source told Fastmarkets.

On the other hand, the distributor source said that demand for rebar in Poland had revived a bit after the holiday lull.

“If the Polish mills are persistent enough, the new [higher] prices can be accepted by the market in the end,” they added.

A consumer source believed that the market would accept the new prices, adding that rebar can be found in the secondary market for 20-30 zloty per tonne less, but only some diameters were in stock.

Import offers from Italy were heard at €656-667 ($720-732) per tonne CPT.

Wire rod
Polish mills offered wire rod in the range of 3,100-3,300 zloty per tonne CPT this week, sources told Fastmarkets, largely unchanged from the end of December.

Demand was low, however, and no major deals were heard in the market.

Market participants estimated the tradable level at 2,900-3,000 zloty per tonne CPT, but bullish sentiment prevailed among Polish mills, keeping the assessed range stable.

Fastmarkets’ weekly price assessment for steel wire rod (drawing quality), domestic, delivered Poland was 2,900-3,100 zloty per tonne on January 12, unchanged since December 8.

“Demand [for wire rod in Poland] is still very weak. There is no restocking, and no demand from construction or any other sector,” a distributor said.

A consumer source confirmed that demand for wire rod in Poland was low. According to the source, this was due to the winter season — when construction activity is low — and the overall economic situation in Europe.

“Interest rates are increasing, inflation grows, and there is a lack of appetite to invest,” the consumer source said. According to the source, these factors have affected construction, which is the main consumer of long steel products.

“The mills are trying to make money with the small volumes they sell,” the source added.

Offers of imported material from Italy were heard at €665-675 per tonne CPT for drawing-quality wire rod and at €655 per tonne CPT for mesh-grade wire rod.

Offers from Ukraine were heard at €640 per tonne FCA for mesh-grade wire rod.

Published by: Darina Kahramanova