Weak demand inhibits trading in Southern European long steel market

Depressed demand, high input costs and bearish sentiment continued to weigh on the Southern European rebar and wire rod markets in the week to Wednesday October 2, Fastmarkets understands.

Fastmarkets price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €580-600 ($641-664) per tonne down by €10 per tonne from €590-610 per tonne on September 25.

Prices edged further down due to the weak demand, cheap imports and the depressed outlook, sources said.

“The rebar price is falling a little, but mills intend to put the price up [and] this is colliding with weak demand and an uncertain outlook in the building sector,” a buyer source said.

“Customers don’t believe in a price increase and sentiment is negative, so they’re in wait and see mode,” the source added.

A second buyer source told Fastmarkets: “This week, the producers tried to move prices up, but buyers are still waiting.”

Scrap prices, meanwhile, edged higher, mainly because of the stronger Chinese market, market participants said.

Fastmarkets’ calculation of its daily index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey, was $373.32 per tonne on Wednesday, up by $8.13 per tonne week on week.

Sentiment in the steel market improved following the Chinese government’s recent stimulus measures, prompting an increase in iron ore and steel prices.

And Fastmarkets’ daily iron ore index for 62% Fe fines, cfr Qingdao was $108.18 per tonne on Wednesday, up from $96.07 per tonne on September 25.

In the long steel market, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €585-600 per tonne down by €25-35 per tonne from €620-625 per tonne.

Sources reported ongoing weak demand and a near-zero appetite for exported stock.

Southern Europe wire rod
In Southern Europe, meanwhile, Fastmarkets’ price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe, was €600-620 per tonne on Wednesday down by €10-20 per tonne from €620-630 per tonne on September 25.

Weak demand and high feedstock costs continued to weigh on European mills, sources said, which therefore lowered their offer prices.

“There is low demand because of the coming winter holiday [season, when] customers don’t want to buy big quantities,” a producer source told Fastmarkets.

Published by: India-Inés Levy

fastmarkets.com