Weak demand inhibits trading in Northern European long steel market

Prices were broadly stable in the wire rod and rebar market in Northern Europe in the week to Wednesday March 13 amid unchanged market conditions.
Mills remained resistant to offering discounts, Fastmarkets heard.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €645-660 ($705-722) per tonne on Wednesday, down by €5 per tonne from €650-665 per tonne week on week.

Weak trading resulted in ongoing bearish sentiment in the Northern European rebar market, sources said.

“There is no demand either for domestic or imported stock,” a buyer source in Germany said.

Fastmarkets’ calculation of its daily index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey was $377.51 per tonne on Wednesday, up from $373.83 per tonne week on week.

Meanwhile, the corresponding Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Northern Europe was €645-660 per tonne on Wednesday, stable week on week.

Weak consumption from the construction industry has continued to inhibit trading in the European long steel market, according to the short-range outlook published by the International Rebar Producers and Exporters Association on March 5.

“The EU market is very quiet as residential construction has declined substantially in northern Europe. There is very little activity and prices from domestic mills are as stable as a rock. There is some increase in imports including unusual origins such as China, Oman and the [United Arab Emirates]. Other sources are not able to compete with domestic offers,” the report said.

However, a softening of raw materials could take lower cost pressure on mills, the report added.

“In Europe, the slow economy has reduced ferrous scrap flow and also demand from the steel industry which is struggling with poor order books. The only good news for steel mills nowadays could be that the raw material prices, both for iron ore and scrap, are going down. Also, lower activity means lower volumes, reducing supply pressure on the markets,” the outlook added.

Published by: India-Inés Levy