Rebar prices fall in Italy, Spain amid decline in end-user consumption

Prices tumbled in the Southern Europe rebar market in the week to Wednesday October 5, with customers reluctant to book large tonnages when forecasts suggest that prices have further to fall, sources told Fastmarkets.
A stagnant market and persistent de-stocking resulted in falling prices in Italy, Fastmarkets understands.

Fastmarkets price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €900–975 ($863-967) per tonne on Wednesday, down by €10-55 per tonne from €955–985 per tonne since last week.

Weak demand resulted in the steel mills reducing their prices, but low end-user consumption resulted in few transactions taking place in the Italian rebar market, sources told Fastmarkets.

“Prices are going down because the market is very flat [and] energy costs are not really going down,” a producer source in Italy said.

“The steel mills are trying to find customers for large tonnages, but the attitude among buyers is that prices are going to keep dropping so [they are] only buy what they need.”

Producers are targeting prices around €960 per tonne, but the lack of demand means few transactions are happening, one market participant told Fastmarkets.

In late September the Italian Treasury discussed providing a financial package to support heavy industries to combat soaring energy costs, but because the Italian government is currently in a state of transition, sources remain uncertain about whether any immediate help will actually be provided.

“Demand is slow at the moment as clients want to see what measures the new government will put into place to stimulate the economy… including price caps on energy costs,” a buyer source said.

But many in the market remain skeptical about the impact of any government intervention.

“In Italy, there is still no price cap. This means the impact energy costs have on the cost of the material varies from €100-200 per tonne,” a buyer source in said. “As you know, the government in Italy has changed, so it will take time before something is implemented.”

The source added that while France and Germany have a cap on energy costs, the lack of such a cap in Italy meant prices were already higher in Italy.

Regardless of input costs, however, mills have targeted lower prices as the low level of demand does not support higher prices, other market participants said.

Production cuts have not yet had an impact prices because demand is so low, sources added.

Prices remain depressed in the Spanish rebar market amid weak trading activity, sources there told Fastmarkets this week.

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €850–870 per tonne on Wednesday down by €75-85 per tonne from €925-955 per tonne last week.

Competition between Celsa and Megasa ahs resulted in both mills dropping their rebar prices, Fastmarkets understands.

International scrap prices, which affect the price of all long steel products, have edged up slightly in October, but fell throughout September, as did domestic scrap prices in Spain.

In the seaborne market, Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was $365.38 per tonne on October 5, up from $361.75 per tonne week-on-week.

Published by: India-Inés Levy