Polish rebar, wire rod prices rise on cautious demand recovery, higher costs

Prices for steel rebar and wire rod in Poland increased in the week to Friday September 15, pushed by improving construction activity, industry sources told Fastmarkets.
At the beginning of the assessment week, local producers were raising offers to 2,750 zloty ($635) per tonne delivered (about 2,720-2,730 zloty per tonne ex-works), up from 2,700 zloty per tonne delivered sought at the beginning of this month.

Those prices were largely accepted in deals, with transactions heard within the range of 2,700-2,730 zloty per tonne ex-works earlier in the assessment week.

In the second half of the week, prices increased further, with transactions reported at 2,750-2,770 zloty per tonne ex-works, but only for minor quantities.

As a result, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, exw Poland, was 2,700-2,770 zloty per tonne on Friday, up by 80-120 zloty per tonne from 2,620-2,650 per tonne on September 8.

Market sources expected that, in the week to start September 18, steel rebar prices in Poland would increase further, still driven by the improving construction activity. Besides, mills were pushing for higher prices, citing rises in rolling costs.

Notably, increased scrap prices in the monthly contracts for September were driving rebar prices upward, according to mill sources. These, combined with the positive expectations for rising demand by the construction sector in the last quarter of the year, were expected to support higher rebar prices in the near term, market sources said.

End-user demand for rebar was likely to improve in October due to an expected recovery in the residential construction sub-sector in Poland, they added.

In July, the Polish government launched a support program for the nation’s first-time homebuyers, offering housing loans with a fixed 2% interest rate over 10 years, with the difference to the actual interest rate covered by the state.

The program, available to young people for their first house or apartment purchase, was intended to stimulate residential construction, according to market sources.

According to one such source, one Polish mill has pushed rebar offers to 2,920 zloty per tonne delivered, but no deals have been concluded at that level yet.

Currency fluctuations and the strengthening of the euro against the Polish zloty also supported a domestic price rise, making imports from the EU less attractive.

The Polish currency was trading at 4.63 zloty to €1 on September 15 compared with 4.60 zloty to €1 on September 8, according to exchange rate website Oanda.com. At the beginning of the month, on September 1, the rate was 4.47 zloty to €1.

Rebar offers from Hungary and Germany to Poland were heard around €605-610 per tonne delivered.

Wire rod
A similar trend was observed in the wire rod market in Poland, with prices rebounding from the low levels seen a week earlier.

Offers from two local mills were reported in the week to September 15 about 2,850-2,950 zloty per tonne, while transactions were heard at 2,750-2,850 zloty per tonne delivered.

Several sources, however, pointed out that, by the end of the assessment week, a price of 2,750 zloty per tonne delivered was no longer available.
As a result, Fastmarkets’ weekly price assessment for steel wire rod (drawing quality), domestic, delivered Poland, increased to 2,750-2,850 zloty per tonne, up by 100 zloty per tonne from 2,650-2,750 zloty per tonne seven days before.

Apparent demand for wire rod in the country was not booming, but some limited restocking supported price rises.

“Buyers have not been booking [wire rod] for stock for months, and there is a need to restock across some grades and sizes,” an industry source told Fastmarkets.

Meanwhile, import wire rod offers to Poland were also trending higher.

One Italian supplier was offering mesh-quality wire rod at €600-610 ($642-652) per tonne delivered, and drawing-quality wire rod at €620 per tonne delivered, up by about €10-20 per tonne compared with early September. Those prices, however, were considered too high by Polish buyers, given the high euro-zloty exchange rate.

One Ukrainian supplier was offering mesh-quality wire rod to Poland about €590 per tonne ex-stock.