Rebar bending overcapacity seen capping prices in Germany

German rebar prices continue to dwindle despite construction being regarded as the only industry still performing in the country, and also in neighbouring north-west European markets.

Some market players argue that construction firms as well as rebar mills and distributors are all caught in a continuous rat race in which they sacrifice prices to snatch orders. Others dismiss this view as notorious whining.

An explanation offered by a manager from a rural stockholder in central Germany is that overcapacity at bending facilities may be behind the situation. “Distributors have built up quite a lot of bending capacities, over-proportionally to the demand volume from customers, and now we have an imbalance,” he tells Kallanish. According to him, the expansions have mainly occurred at big chains, which over the past five years have expanded bending capacity by 70%, he estimates.

Furthermore, he sees a gap between cities and countries. “There are hotspots where prices and volumes match well, like Stuttgart or Hamburg, where demand is keeping up,” he comments. And, of course, distributors from the outer rims are trying to snatch city jobs. “You have an advantage if you are close to a metropolitan area,” the manager adds.

A manger from an eastern DIY store from a metropolitan area is not quite sure if the arguments are accurate. “In this area, it’s the same bending facilities as there always were, and no expansions; not to my knowledge.”

Both nevertheless agree that base prices for rebar have come down to €230/tonne ($254), which, plus the size surcharge of €265, translates to a delivered price of €495.