Demand in the Northern European steel rebar market remained depressed in the week to Wednesday October 26 amid weak end-user consumption and a continued wait-and-see attitude among buyers.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €850-920 ($852-922) per tonne on Wednesday, down by €30-65 per tonne from €915-950 per tonne on October 19.
Mills offered significant discounts to stimulate market activity. But low demand and an uncertain outlook resulted in little trading activity.
“Demand is very poor. This is causing downward pressure on prices. There is a small window where price could drop further, however it cannot go down too much and remain profitable for producers to keep producing,” a buyer source said.
While there is still a considerable number of construction projects in development in the public and infrastructure sectors, many projects have been postponed due to a lack of labor force and high costs for building materials.
Demand has dramatically fallen in the private housing sector as many projects have been cancelled, sources said.
Despite falling prices, market activity has not picked up. With so few transactions taking place, it has become difficult to gauge a market price, Fastmarkets heard.
“Producers are talking prices down but no one is buying. You can say the price is €600 per tonne but no one is buying so it’s not really the price,” a second buyer source said.
“If prices keep dropping there will be more activity. Prices are still comparatively high and so mills may have to drop prices further,” the second source added.
Despite energy costs stabilizing over the last fortnight, energy prices are expected to surge toward the end of the fourth quarter as demand for energy rises.
If demand does not pick up but energy costs surge again, mills may cut output further, Fastmarkets heard.
The market is not expected to recover for the remainder of the year, sources said.
International scrap prices impact the price of all long steel products. Scrap prices have stabilized through mid-October.
Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was €351.83 per tonne on Wednesday, down from €365 per tonne a week earlier.
Published by: India-Inés Levy
