Last week prices continued their softening trend in the European rebar market. Some in the market think that the current prices could turn out to be bottom levels, while others think that the bottom point is approaching but that the decreasing trend will continue for another while. Scrap prices appear to be the deciding factor; however, it is not clear how long the decline in scrap prices will last. Regarding rebar, no change has been observed in terms of demand, in spite of the price decreases.
In Spain and Portugal, prices fell again last week, with the Portuguese domestic rebar market closing the week at the level of €340/mt delivered to customer. On the other hand, rebar export offers given from Spain have been at €320/mt FOB, and some bookings were heard to have been concluded at this level. In the Spanish domestic market, end-user demand is almost nonexistent and the construction sector is nearly at a standstill. Prices in this market have continued their softening trend under the influence of scrap prices. Spanish mills have given a variety of offers depending on customers and tonnages, and so different price levels have continued to be heard in their local market.
As for Italy, the situation has been similar to that seen in Spain. Italian mills' rebar export offers have decreased to the level of €320/mt FOB, while in the domestic market rebar prices have been in the range of of €330-350/mt ex-works. On the export side, Italian mills have continued to focus their attention primarily on the African and Greek markets.
Looking at Greece, only price levels have been seen to show some change. Due to the continuous softening of prices of import material, producers have been forced to lower their prices. Last week in the local Greek market, prices declined to levels of €355-365/mt delivered to customer. Also, for their exports the mills have continued to head in the direction of the Algerian market.
Moving to eastern Europe, mills have lowered their prices in Bulgaria and Romania. Continuous price reductions applied by mills competing with import rebar have led to a decrease in the market preference for import material. However, stockists have chosen to delay their purchases given the quite low levels of end-user demand in the eastern European market.
Meanwhile, in the UK market producers have also decreased their prices, to an average of $450/mt for delivery to customer. Although some fluctuations have been observed in price levels, the UK has also been experiencing difficulties with regard to demand. Rebar offers given from Lithuania to the UK were last week heard at the level of £295/mt ($421/mt) CFR.
In general, the European rebar markets have continued to show their declining trends of previous weeks. Some producers attempting to operate at minimum capacity have been applying discounts due to the softening of scrap prices, their desire to empty their stocks, and also due to the difficulty experienced in terms of demand. However, such discounts have not contributed to changing the demand levels. Even buyers with a real intention to buy in rebar have decided to postpone their purchases as far as possible given the continuous decrease of prices. Market rumors increasingly suggest that the bottom point is near, though no one knows exactly where the bottom point is.
€1 = US$1.25928