Polish steel rebar producers bump up prices on high costs, strong orders

Polish steel rebar producers have raised their offer prices sharply because of high costs and solid order books, Fastmarkets heard on Friday July 22. In the week to July 22, Polish producers set their rebar offers at 4,000 zloty ($856) per tonne cpt, equivalent to about 3,950-3,980 zloty per tonne exw. This was sharply up from official offers of 3,850 zloty per tonne reported earlier in July.

The new offers, however, have not been accepted in bookings yet. Sources pointed out that, earlier in July, large tonnages of rebar were sold in the domestic market at lower prices, so buyers were not willing to accept higher offers.

Despite resistance among buyers, mills intended to maintain their offers at current levels, citing the high costs of energy and healthy order books.

Several sources told Fastmarkets that Polish mills were largely sold out for August-rolling rebar, and had managed to sell large portions of their production in foreign markets such as Germany, Hungary, Slovakia and the Czech Republic.

“There is quite a big difference between Polish and German rebar prices, so buyers in Germany are interested in Polish rebar bookings,” a source in Poland told Fastmarkets.

Other sources suggested that Polish producers will extend their summer maintenance periods this year in order to “limit supply and keep the rebar price steady,” Fastmarkets heard.

Polish buyers estimated the achievable price for domestic rebar at 3,800-3,880 zloty per tonne delivered.

As a result, Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, exw Poland, was 3,800-3,880 zloty per tonne on Friday, up by 80-200 zloty per tonne from 3,600-3,800 zloty per tonne a week earlier.

In the secondary market, stockholders were offering rebar at 4,100 zloty per tonne cpt earlier this week, but eventually lowered their offers to 4,030-4,050 zloty per tonne cpt by Friday due to a lack of trading activity. This was up from 3,900 zloty per tonne cpt last week.

Meanwhile, rebar offers from Italy to Poland were heard at €850-860 ($867-877) per tonne cpt.

Rebar from Hungary was offered to the nation at €850 per tonne cpt.

And some limited tonnages of Moldova-origin rebar were available to Polish buyers at €840 per tonne cpt.

Post-holiday prospects
In general, market sources agreed that Polish mills will have good opportunities to achieve higher prices in deals for September-rolling rebar.

Notably, market sources have reported recovering demand among end-users in the construction industry.

The performance of the construction industry, the major rebar consumer, was generally good in Poland except for the residential sub-sector, where the number of the new projects has been decreasing recently due to high interest rates, Fastmarkets heard.

“Construction companies want to secure rebar in their stocks to keep projects running. There is a lot of concern about energy supply and production sustainability in September-December due to the Russian war in Ukraine.

During peak hours, electricity prices in Poland were exceeding 1,000 zloty per MWh in July, market participants told Fastmarkets. This was up from 650-700 zloty per MWh in June, and sharply up from 378 zloty per MWh in July 2021.

And market participants told Fastmarkets that, in the fourth quarter of 2022, European manufacturers might be faced with gas quotas, with the steel industry in particular unlikely to receive a big allowance, so more production cuts were possible.

The European Commission is working on emergency gas rationing for EU countries, sources told Fastmarkets, in case Russia cuts off its supplies completely.

Published by: Julia Bolotova