Weak demand and bearish sentiment plagues Northern European long steel market

A pessimistic outlook and minimal market activity resulted in few trades being reported in the Northern European rebar and wire rod markets in the week to Wednesday June 14.Rumors that mills will target higher prices for the materials in the coming weeks could prompt buyers to restock, Fastmarkets heard.

Mills have become resistant to dropping prices any further amid already unworkable tight margins, sources said.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, delivered Northern Europe was €620-640 ($669-691) per tonne on Wednesday, down by €10 per tonne from €630-650 per tonne last week.

Market fundamentals were largely unchanged in the rebar market. Ongoing economic uncertainty, high interest rates and high inflation have resulted in construction projects being stalled or cancelled, sources said.

Many end-user industries have opted to postpone construction projects until economic conditions improve, Fastmarkets heard.

While some sources believe the price floor has been reached, other sources do not rule out rebar prices dropping further.

As a result, consumption has remained weak and market confidence depressed.

“Everybody is looking for when the price floor will be hit. There have been minimal bookings and very few inquiries. It is hard to work out where the price level is for domestic rebar because of so little volume being traded,” a buyer told Fastmarkets.

Other sources, however, were more optimistic.

“The situation is unchanged. Mills are projecting that prices will increase very soon. This has prompted buyers to book small amounts. It remains to be seen whether prices will rise or be accepted by the market,” a trader in the region said.

Wire rod prices were stable in the week to June 14 due to unchanged market fundamentals.

Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Northern Europe was flat at €610-630 per tonne on Wednesday.

“Demand is stable and prices are unchanged at the moment,” a wire rod producer in the region said.

“The market is very quiet and I don’t see much movement at the moment,” a trader told Fastmarkets.

A major wire rod producer in Portugal announced production cuts for the entire month of July. Output cuts could pressure demand and prices upward throughout Europe because of the supply reduction, sources said.

Uncertainty around quotas for imports from countries outside the UE combined with long lead times for imports resulted in minimal appetite for imported wire rod.

Reduced supply of domestic products in Europe and low appetite for imports could result in demand rebounding, sources said.

Published by: India-Inés Levy