Customers remained resistant to restocking significant tonnages because they expected further price declines.
Mills asserted, however, that further price drops were not feasible because it would mean selling below cost.
Mills have begun to reduce their output to manage the depressed market conditions, Fastmarkets heard.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €560-580 ($599-620) per tonne on Wednesday, down by €20 per tonne week on week from €580-600 per tonne.
Bearish sentiment and weak demand resulted in minimal trading in the Northern European rebar market, Fastmarkets heard.
“The market is not moving at the moment. Mills want to increase prices but buyers are not accepting this. Import offers are at a similar price, so there is zero demand for imports at the moment,” a trader source in Germany said.
“There is no trading activity. Input costs such as scrap have risen, but customers still expect discounts,” a buyer source said.
“I am out of the market now, and I am not buying. Prices are not moving because there is so little market activity,” a buyer source from Austria said.
Producers cannot reduce their prices any further without hitting the cost line, industry sources said.
Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Northern Europe, was €580-590 per tonne on Wednesday, narrowing downward week on week by €10 per tonne from €580-600 per tonne.
Current downward price pressure in the Northern European market has prompted wire rod producers to cut their output, Fastmarkets heard.
Producers have raised their offer prices to €600 per tonne delivered, but the market has not yet accepted this.
“Prices have to increase because mills are losing money, so if price rises are not accepted, production cuts are unavoidable,” a wire rod trader in the region said.
“Customers are only restocking minimum tonnages because they think prices will continue to go down,” the same source added. “Cut-and-benders are dragging prices down because they are selling at unworkably low prices and attempting to restock at low prices. But prices around €570 per tonne delivered are not workable for producers.”
Published by: India-Inés Levy