The Spanish steel industry is entering its seasonal slowdown in activity, Kallanish notes.
The summer lull, combined with weak market conditions and the entry into force of the new EU import regulation, is expected to define the trend in July, when most producers plan to bring forward their maintenance programmes.
The Spanish scrap market began July with a new downward price movement. Domestic prices have fallen by nearly €10-15/tonne ($11.43-17.15/t), mainly reflecting recent movement seen in international raw materials markets.
“Most mills are trying to take advantage of current market conditions and growing their stock ahead of the summer stoppage of activities,” one seller comments.
According to another source, domestic scrap market collection activity remains relatively stable. “While sellers are aligning purchases with current demand, they are increasing inventory levels in the expectation that prices will rebound once steelmakers restart operations following the summer shutdowns,” he comments.
The Spanish scrap market will end the week with both new E8 grade scrap and shredded E40 grade generally offered at €325/t. Other qualities, E3 and E1, are respectively at €300-295/t and €280/t delivered.
Suppliers generally expect prices to decline further through the month, as international scrap values do not yet appear to have reached a floor.
Demand in the rebar market remains weak. According to distributors, the introduction of the new EU import tariffs has heightened uncertainty, prompting construction companies to delay purchasing decisions. Relatively high prices are also limiting buying interest.
“We are keeping inventories low. The market remains cautious, with trading activity largely restricted to small volumes required for existing projects,” one distributor comments. Most sellers report the domestic steel industry has marginally reduced production in July and anticipates weaker market conditions during the summer.
Offers for 16mm rebar in Spain are at €508-518/t base. Including €262/t size extras and loading expenses, transaction values are at €770-780/t ex-works. Most suppliers are already selling material at €790-800/t.
Meanwhile, hot-rolled coil sales remain stable. Mills are trying to raise prices, something customers are finding hard to accept, as demand in most consumer sectors remains muted, except for automotive where it is reasonable. “Producers say they have healthy stock levels, whilst the distribution sector is reluctant to build inventory given the uncertain demand outlook,” a market participant observes.
Spanish HRC prices stand at €740-750/t ex-works. Distributors’ levels have surpassed €780/t delivered.
