Prices fall in Italian steel rebar market; Spanish sector stable

Weak demand and a pessimistic outlook among market participants continued to stifle activity in the rebar market in Southern Europe in the week to Wednesday October 19.Mills offered competitive discounts to stimulate market activity, but customers remained in wait-and-see mode.

Sluggish demand and pessimism regarding the demand outlook for the rest of 2022 resulted in minimal trading in the Italian rebar market, Fastmarkets understands.

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, exw Italy, was €885-925 ($867-907) per tonne on Wednesday, down by €10-30 per tonne from €895–955 per tonne last week.

Rising interest rates, high inflation and uncertainty regarding a worsening recession across the continent has resulted in construction projects being postponed or cancelled, sources told Fastmarkets. This in turn resulted in weak end-user consumption for long steel products.

Customers were waiting for prices to drop further before restocking, they added.

One producer source said that there was little buying activity because consumers were waiting for prices to fall.

“Rumors that international scrap prices are going to increase soon have resulted in producers becoming more hesitant about offering any further discounts,” the source said. “We are not optimistic regarding a recovery in demand for the end of 2022 or the first months of 2023.”

Production cuts have not affected prices so far because demand was so low, sources said.

The potential for surging energy costs was another key factor that was making mills resistant to further price falls, they added. And while energy costs have fallen over the past fortnight, they were expected to rise again toward the end of the fourth quarter.

Imported stock bought from Turkey by a major Italian trader was being sold at a price €50-60-per-tonne lower than offers for domestic rebar. But overall appetite for imports remained depressed due to safeguarding risks, long delivery times and falling prices in the domestic market.

The Italian government has pledged support to help mills survive high energy costs. But the country’s new government was not yet established, so no support has yet been put in place, sources told Fastmarkets.

“We are still without a new government, so now there isn’t a clear view about help to high energy consumers like the steel industry,” one producer source in the region said.

Prices remained stable in the Spanish rebar market, Fastmarkets understands, although weak demand and a wait-and-see attitude among buyers continued to weigh on market activity.

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Spain, was €800-850 per tonne on Wednesday, stable week-on-week.

International scrap prices affect the prices of all long steel products. Scrap prices have stabilized through mid-October.

Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was €365.00 per tonne on October 19, up slightly week-on-week from €362.41 per tonne.

Published by: India-Inés Levy