European longs market remains weak amid sluggish demand
The sentiment in the European longs market has been mostly unchanged this week, with market players still reporting a pessimistic outlook for the coming days.
The complicated international situation – the Houthi attacks in the Red Sea, new turnarounds in US tariff policies and the euro-dollar exchange rate still being unfavorable for European sales – as well as the approach of the summer holidays are pushing operators aside and making them wait for better times.
The local Italian longs market showed new declines in rebar prices, “but believe me, no one is selling at these levels,” an Italian source at a mill commented. “It’s just that everyone is getting more and more aggressive, and it is causing a market stalemate,” he concluded. According to SteelOrbis’ information, in fact, local rebar prices in Italy have declined by a further €10/mt on the lower side this week, standing at €220-230/mt ex-works base (€485-495/mt ex-works including regular extras), even though some sources still report €240/mt ex-works base (€505/mt ex-works including regular extras). Rebar demand in the Italian market remains weak, still covered by adequate offers.
Local Italian mills and traders are still reporting logistic difficulties, with few trucks available for deliveries, very high prices and traffic jams that will start with the beginning of the summer season.
The situation is similar in the Italian wire rod segment, where prices have remained stable week on week but “the market response is very slow”, a source said. Local wire rod prices have been reported at €610-625/mt delivered for drawing quality and at €595-610/mt delivered for mesh quality.
In the eastern Europe, especially Poland and Slovakia, sources have reported a slow market for both rebar and wire rod, with rebar prices in Poland reported at around €570-575/mt delivered.
As for exports, ex-Greece rebar and wire rod prices showed no changes, remaining at €575/mt FOB and €570/mt FOB, respectively. Ex-Spain rebar prices to UK ports, instead, showed a €5-10/mt decline compared to last week, standing at €545/mt FOB. Ex-Italy rebar has been reported at €540/mt FOB.
In the import market, Turkish rebar and wire rod have been reported at €480-490/mt CFR and €490-495/mt CFR respectively, while prices for Algerian material have been reported at €510/mt CFR for both. Egyptian rebar has been reported at €490-495/mt CFR, whereas wire rod stands at €500-505/mt CFR. Malaysian and Indonesian wire rod have been reported at around €490/mt CFR in both cases.
€1 = $1.17 (European Central Bank, July 10)
Steel rebar prices in Northern Europe follow downtrend seen in south
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €635-670 (713-752) per tonne on May 28, down from €655-680 per tonne on May 21.
In Germany, domestic material as well as material from Poland was available within the range of €635-645 per tonne delivered, with demand in the country being described as sufficient, unlike elsewhere in Northern Europe.
In Austria, local rebar was available at €640 per tonne delivered, while offers of Italian material came at €635 per tonne delivered.
The highest prices were heard in Netherlands, at €670 per tonne delivered, which was down by €10 per tonne compared with the previous week.
In Spain, prices dropped somewhat this week after several weeks of stability. Workable levels fell to €605 per tonne delivered, versus €610 per tonne heard earlier in May, and offers at €620 per tonne delivered.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Spain, was reduced correspondingly to €605 per tonne on May 28, from €610-620 per tonne on May 21.
The lowest prices were usually seen in Italy. In the north of the country, prices varied within the range of €540-560 per tonne ex-works, while in the south they were at €570-590 per tonne.
Some bookings were reported within the range of €555-585 per tonne ex-works. After the assessment was published, however, a trading source said that in the north some tonnages had been heard sold at prices as low as €530 per tonne ex-works.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, exw Italy, widened upward slightly to €540-585 per tonne on May 28, versus €540-580 per tonne on May 21.
Limited supply prevents German rebar price drop
German rebar prices have continued to defy the downturn in scrap prices seen since April, with the country’s production shortage helping support values regardless of international factors, market participants tell Kallanish.
The stoppage of crude steel production at Riva Hennigsdorf will continue until mid-year, while rumour has it that the break will be extended until year-end. Certain rebar dimensions beyond the ordinary have been hard to obtain for the past 2-3 months from Riva Germany, Kallanish hears from at least two buyers. Riva group has largely left its French plants to serve the German market. “We get our offers from Bonnières sur Seine these days,” a Ruhr-based buyer says.
Riva’s quasi-withdrawal has left the domestic market to the other players. “Riva is now taking a rest, cushioned by the comfortable German laws for short time working,” the buyer says. “So this gives Badische Stahlwerke and Feralpi Riesa a comfortable position: both can supply the full range, both can operate at full capacity.”
This means the remaining mills can also keep prices elevated. “I cannot see why prices should soften under this scenario,” the buyer says. Observers therefore see rebar offers very much at where they have been since late April, €420-430/tonne ($465-476), which plus the size extra of €265 would result in a delivered price of €685-695/t.
An eastern German manager concurs and notes that imports of a limited choice of size range can be had for €630/t or less delivered. “But you need to take lots of at least 5,000-7,000 tonnes,” he notes.
Christian Koehl Germany
IREPAS in Athens: Markets in unknown territory
The 92nd meeting of IREPAS (the International Rebar Exporters and Producers Association) was held in Athens on April 27-29 in conjunction with the SteelOrbis Spring’25 Conference.
There were 143 representatives from 49 different producers among the 502 registered delegates from a total of 58 different countries. There were also 97 registrations representing 50 different raw material suppliers.
At the opening of the conference, Murat Cebecioglu, chairman of IREPAS, said that the global long steel products market is currently overwhelmed by a spiral of duties and trade measures and protectionism such as has never been experienced before. He stated that the recently created uncertainties in the market on top of the already existing problems, the markets are now somewhat lost.
The IREPAS chairman added that the current environment is not bright and the level of competition in the global market is very strong, being almost at maximum levels.
On the last day of the conference, producers of long steel products, as well as traders and raw material suppliers, shared the conclusions reached at their special committee meetings regarding the current situation in the markets with the general participants at the event.
Raw Material Suppliers at IREPAS: Challenging year ahead, market will be much slower in H2
Jens Björkman, the chairman of the raw material suppliers committee, noted that the EU steel industry has started the year quite well, though steel production in the region was low in the first quarter. He highlighted that the new German government is expected to ease the pressure from the uncertainties on the market, which may boost steel production. Noting that the green transition in the EU seems to be postponed, indicating that there seems to be no viable transition until at least 2030, he stated that a lot of mills in the EU will start shifting from the blast furnace route to the electric arc furnace route in the next five to 10 years and there will be uneven demand for scrap until that time. Addressing the scrap export restriction plans in the EU, he stated that, as scrap demand is low in the region now, any restrictions would put pressure on the steel industry but may also lead to more bureaucratized trade between scrap generators and steelmakers.
Regarding the Trump administration’s tariff actions, the chairman of the raw material suppliers committee stated that, in the first few months this year, sales to the US were at enormous levels as a new tariff was anticipated. Noting that EU-based mills were running at high capacity to export to the US before the implementation of new measures, he said he believes that the market will be much slower in the second half of this year. He added that Trump’s second term will be much different than his first term. In addition, he expressed the belief that, despite the actions taken by the US, Canada and Mexico will not impose tax on steel exports to the US as the US is their biggest trade partner and a restriction would hurt their own industries.
Björkman stated that iron ore prices have been fluctuating at around $100/mt CFR, compared to $89/mt CFR seen in September 2024, due to higher production at the end of last year and early this year. He noted that, if China lowers steel production and the general output of iron ore increases, these two factors together will result in lower iron ore prices.
Traders at IREPAS: No reduction in US tariffs expected, trade conditions remain challenging
F. D. Baysal, the chairman of the traders committee, stated that, although the US imposing new 25 percent tariffs on imports from the countries previously exempted from the Section 232 measures seems like an advantage for the countries such as Egypt and Turkey which were already subject to 25 percent tariffs, only 18 percent of total imports into the US was from the Section 232-paying countries and 82 percent was from the exempted countries. He added that, despite the advantages some countries will gain, there will be no improvement in the market conditions given the economic uncertainties and the general market slowdown. Also, he said he believes that there will be no reduction in the US tariffs.
Looking at the EU, he said there have been some reductions in the import quota volumes, resulting in more challenging trade conditions. Considering the increased sales of wire rod and HRC over the past quarter from the ASEAN region to the EU, Mr. Baysal noted that, even though there are some restrictions on certain ASEAN countries, the EU is now more open to those countries compared to its old traditional markets given the free trade agreements between the EU and some Southeast Asian countries.
Mr Baysal added that he foresees no reduction in China’s exports and capacity utilization going forward.
Producers at IREPAS: Markets in unknown territory because of tariffs
Murat Cebecioğlu, chairman of IREPAS and also chairman of the producers committee, pointed out that the hot topic during the producers committee meeting was tariffs and their effect on business, adding that this is completely unknown territory and that nobody has any idea where things are headed at the moment, which makes it very difficult to conduct business.
He said that, as the Chinese domestic market is not doing so well, China will still be the main factor depressing prices as it is heavily dependent on exports and its prices are quite low compared to those of other exporters. He went on to say that the stimulus package is not helping much at the moment to boost to market, which is why China is selling billet to countries like Turkey and many other countries.
The IREPAS chairman noted that, as billet is a competitive alternative to scrap in terms of price, particularly Turkish mills will keep buying billet, adding that, as long as prices are at the current levels buying billets is much more profitable, even though the lead times from Asia are two to three times longer.
Commenting on the GCC shifting from being an importer to being an exporter, Mr. Cebecioğlu said that the reason they are exporting is that they have overcapacity, and are selling to the EU, especially Germany, and to North Africa and Israel. He indicated that the answer to the question on whether their exports will continue depends on how infrastructure projects will take shape in the region in the coming period and how much of that demand the local market can absorb: otherwise, they will continue to export.
German rebar prices climb further
Germany’s rebar mills have given their prices another push in April, which appears to have been accepted in the market, Kallanish notes.
Attempts to bring up base prices over recent months received limited success, not reaching the €400/tonne ($455) target until March. That mark has now been passed, owing probably to the prolonged shutdown of the liquid phase at Riva Hennigsdorf.
The mill near Berlin stopped steel production at the end of December and introduced short working hours for its staff. Production was not restarted at the end of March as originally planned, with the suspension continuing until further notice.
Buyers currently see the base price at €420/t. Adding the fixed size extra of €265, the delivered price would be at €685/t.
“With Henningsdorf out, two of the other producers were able to assert higher prices, and I believe prices are trending up further,” one manager tells Kallanish. Paradoxically, the trend could also be stopped by Riva’s German subsidiary as soon as it decides to rejoin the improved market and restart production, the manager adds.
Rebar import pressure offsets CMC Poland cost cuts
CMC Poland’s earnings should remain fairly even sequentially in the February fiscal quarter as cost management offsets a weak market environment. This comes after imports depressed margins in the November quarter, offsetting improving Polish demand in certain end market applications and regional supply discipline, says US parent CMC.
CMC Poland’s shipments fell 9% on-year in the November quarter to 343,000 short tons, with merchant bar and other products down 7% to 206,000st and rebar falling 12% to 107,000st. Average selling price inched up 1% to $639/st, Kallanish notes.
Cost of ferrous scrap utilised also rose 1% to $370/st, meaning metal margin was up $1/st to $269/st. Net sales fell 7% to $209.4 million and adjusted Ebidta was down 34% to $25.8m. Still, this gave a respectable Ebitda margin of 12.3%.
Rebar imports into Poland from Germany in January-October 2024 reached 410,863st, up 43% on-year. They accounted for 65% of all rebar imports into Poland versus 56% in 2023 – and 36% in 2022 – CMC points out.
Poland’s residential construction market is recovering; new housing permits and the number of units under construction have rebounded, CMC notes. The expected release of €65 billion ($67 billion) to Poland from the EU Recovery and Resilience fund should boost activity.
Adam Smith Poland
Subdued consumption limits trading across Southern European steel longs markets
Fastmarkets’ price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €570-590 ($620-642) per tonne, stable week on week.
Prices were stable across the Italian and Spanish rebar markets due to an uncertain outlook, Fastmarkets heard.
“Demand continues to be weak. Mills are trying to invert the price trend, but customers don’t believe in a price increase, so they prefer to stay in wait-and-see mode,” a buyer source said.
Prices could remain at these levels in the coming weeks, sources said.
Meanwhile, export offers from Italy were reported at $570 per tonne FOB to Switzerland and France.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €605-610 per tonne on Wednesday, stable week on week.
Sources reported unchanged market conditions in the Spanish rebar market.
“Prices are very stable, and there is no movement for the time being. Mills are trying to push for increased offers since last week. Customers did not accept these price rises; however, buyers need to restock and may need to accept these higher offers in the coming weeks,” a producer source said.
“Prices are more or less stable, but consumption is still weak,” a buyer source from the region said.
Southern European wire rod
Fastmarkets’ price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe was €600-620 per tonne on Wednesday, stable week on week.
Meanwhile, import offers continued to be reported at €580-590 per tonne CFR from Algeria, Turkey and Indonesia.
But import quotas for this quarter were reported to be full. As a result, the wire rod import market is expected to slow down until the new quota period begins on January 1, sources said.
Italian rebar activity stagnates with low prices
Italian rebar prices are mostly stable on-week although the low point of the range has decreased €10/t ($11) compared to the end of September, buyers tell Kallanish.
Last month, producers’ efforts to implement a price increase have not produced the desired effect, and activity is considered too slow to achieve the hikes.
Buyers and distributors anticipate a further price decline in the upcoming weeks, in line with scrap prices, also seen decreasing this month.
Current transaction values in the domestic market are at approximately €280-300/t base ex-works. Two buyers report purchasing limited volumes.
Including additional size extras at an average cost of €260/t, current values in Italy hover this week at €540-560/t ex-works.
The current price for domestic mesh stands at approximately €390-400/t, not accounting for transport costs. An extra fee of €300/t applies for size extras, sources suggest.
Natalia Capra France
Polish steel rebar, wire rod prices decrease further on poor demand
Wire rod
Polish mills announced lower offers for October-delivery low-carbon drawing quality wire rod, at 2,700-2,750 zloty ($692-705) per tonne CPT, sources told Fastmarkets.
In comparison, at the beginning of September, similar material was on offer at 2,800-2,850 zloty per tonne CPT.
But persistently low demand has made producers revise their offers downward, Fastmarkets understands.
Fastmarkets’ sources estimated the tradeable market level at 2,650-2,700 zloty per tonne CPT.
As a result, Fastmarkets’ price assessment for steel wire rod (drawing quality), domestic, delivered Poland, was 2,650-2,750 zloty per tonne on Friday, decreasing by 50 zloty per tonne from 2,700-2,800 zloty per tonne on September 27.
“Demand is still very weak, and there is no restocking,” a distributor source told Fastmarkets. The source added that the situation remained unpredictable due to the conflicts in Ukraine and the Middle East.
Import offers of low-carbon drawing quality wire rod from Italy to Poland were heard at €630-650 ($695-717) per tonne CPT, depending on the destination.
From Ukraine, offers of mesh-quality material were heard at €600-610 per tonne CPT.
Moldava-origin mesh-quality wire rod was on offer at €620 per tonne CPT.
Rebar
Prices for Polish rebar also decreased during the assessment week, and were heard at 2,530 zloty per tonne CPT.
In comparison, at the beginning of the previous month, Polish rebar was on offer at 2,610-2,660 zloty per tonne CPT.
Market participants estimated the tradeable market level for the assessment week to be 2,500 zloty per tonne CPT.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, cpt Poland, was 2,500-2,530 zloty per tonne on Friday, down by 70-75 zloty per tonne from 2,570-2,605 zloty per tonne on September 27.
In the secondary market, prices for rebar from stock were heard at 2,620-2,650 zloty per tonne CPT, depending on the region.
Demand for rebar in Poland also remained weak, according to Fastmarkets’ sources.
The completion of some significant construction projects will be postponed until next year, Fastmarkets understands.
“Some infrastructure projects, which are supposed to be funded by the EU, will start no sooner than the first half of 2025,” a second distributor source told Fastmarkets.
Besides, it was not clear yet whether the government’s program to grant low-interest-rate loans to first-time home buyers would continue. The program was expected to support the residential construction sub-sector.
“The government does not even know what form the program would take. I doubt it will come into force in the first half of next year,” the second distributor said.
Polish domestic rebar prices were still under pressure from imports, Fastmarkets understands. Import offers of rebar from European suppliers to Poland were heard at €600-620 per tonne CPT.
Seven key things Fastmarkets learned during Irepas Fall 2024 meeting
More than 490 delegates from around the world gathered in Paris on September 15-17 to network and to participate in this key event for long steel producers.
Here are the seven main topics that were discussed at the conference:
Chinese dominance
China’s dominance in the international steel market has strengthened over the past year amid a drop in domestic demand and insufficient production cuts, and it was highly likely to continue in 2025.
Yeoh Wee Jin, secretary general of the South East Asia Iron & Steel Institute (SEAISI), described this year’s events in China as “a third tsunami” during a panel at the Irepas event. He expected the country’s steel exports to exceed 100 million tonnes this year, compared with 89 million tonnes in 2023.
Fall in iron ore prices
The decrease in steel production in China resulted in a fall in iron ore prices, as well as the accumulation of a significant stock of iron ore. Wilhelm Alff, chairman of the Irepas traders’ committee, said that iron ore stocks at Chinese ports currently totaled 149 million tonnes.
Fastmarkets’ daily index for iron ore 62% Fe fines, cfr Qingdao, has averaged $91.87 per tonne so far in September, compared with an average of $135.03 per tonne in January this year.
Meanwhile, scrap collection in Europe and the US has slowed down, Jens Björkman, the chairman of the raw material suppliers’ committee, said. This helped to support prices for the product despite delayed demand in Turkey.
The Middle Eastern country has switched to purchases of Chinese steel billet since the summer, when prices for the material became low enough to make production of rebar from billet more attractive than from scrap.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, has averaged $363.36 per tonne so far in September, compared with $414.12 per tonne in January 2024.
Consequently, iron ore prices fell by almost 32% in the period under consideration, while those for scrap fell by 12.23%, making the blast furnace steel production route more profitable.
“Everybody wants to be a blast furnace-based steel producer for the next six months,” Alff said.
Shift in Turkey
Chinese steel prices remained attractive, including those for billet, so it was highly likely that Turkey would continue to meet its needs through billet imports, which would result in lower steel output in the country.
This situation could also exert pressure on scrap prices.
Trade defense
Turkey itself was limited in its long steel export opportunities at the moment, considering the imposition of trade defense measures in the US and in Canada, the almost-complete take-up of import quotas in the EU for the third quarter of 2024, with tonnages already sold for delivery in the fourth quarter, and with recent restrictions on the supply of steel products to Israel.
Some countries that formerly procured long steel from Turkey – such as Egypt, Algeria and states in the Gulf region – have become exporters themselves, according to the chairman of the Irepas producers’ committee, Murat Cebecioglu.
Yemen, plus a few other countries in the Middle East, and Latin America were currently the key destinations for Turkish long steel exports, he added.
Regional differences
Looking at the EU, Cebecioglu said that business has seemed to be at a standstill in the region for more than a year, and little or no improvement was expected in the next six months or so, a point on which other delegates at the event agreed.
Gulf Co-operation Council (GCC) countries were currently in a slightly better position than those in other regions because their economies were moving in the right direction.
New projects in Saudi Arabia, for example, were creating demand in the region, with the construction and real estate sectors being the driving forces.
Yeoh said that ASEAN economies were also growing, albeit more slowly because of the generally unfavorable situation globally. He said that the construction sector was booming across the region, except in Thailand. Meanwhile, manufacturing was weakening, mainly due to soft external demand.
Earlier this year, he said that ASEAN steel demand was expected to reach 76.5 million tonnes in 2024, up from 73.5 million tonnes in 2023.
Overcapacity in Asia
Meanwhile, unsustainable overcapacity and de-greening were in prospect in Southeast Asia, with at least 104.4 million tonnes per year of new capacities expected to come onstream by 2030. These would push the region’s total capacity to 181.5 million tpy if they were all implemented, Yeoh said.
Around 83.6 million tpy of new capacity would be based on blast furnace-basic oxygen furnace technology, Yeoh said, while only 20.8 million tpy would be based on direct reduced iron (DRI) and electric-arc furnace (EAF) capacities, and this would lead to an “explosion” of greenhouse gas emissions by the region.
Decarbonization
At the same time, Europe’s imposition of its CBAM regulations and the global trend for decarbonization were other major topics at the Irepas event.
Since its start in October 2023, buyers of goods originating outside the EU must purchase certificates corresponding to the total volume of greenhouse gas emissions created by the production of the goods.
The costs of these certificates are calculated by the European Commission on a weekly basis, related to the average price of the closing EU Emission Trading System (ETS) carbon dioxide (CO2) allowance for each week.
By placing a fair price on the carbon emitted during the production of all carbon-intensive products entering Europe, European mills that currently must pay for carbon credits equivalent to their carbon emissions will be put on a more equitable basis with producers that operate in exporter countries that do not impose similar taxes.
Opinions were divided on the effects of the CBAM rules on the European market – and beyond it. Many delegates to the Irepas event felt that CBAM could help European mills to remain competitive when faced with economic challenges. Some sources, however, did not think that CBAM would either encourage global decarbonization or significantly rebalance global markets.
CBAM has put a cost on carbon, but it was not enough to counter the other factors which have resulted in a lack of balance in the global markets, these sources said.
These factors included foreign country subsidies, lower gas and electricity costs, lower labor costs, and fewer or no regulations in the construction sector, the sources added.
Global overcapacity was also expected to slow the decarbonization transition and to hamper innovation, Luciano Giua, economic and policy analyst at the Organisation for Economic Cooperation & Development (OECD), said during the event.
Published by: Vlada Novokreshchenova, India-Inés Levy
