The Italian merchant bar market continues to face low demand, although market operators say this situation is in line with their expectations for the first quarter of 2011. In other words, the merchant bar segment is not performing as well as the flats sector, but is still in a better situation compared to other long steel products, especially rebar, for which trading activities are fairly sluggish.
On the whole, end-users' inventories are on the low side. Moreover, many companies are engaged in destocking activities and thus they tend to sell at low prices.
As regards merchant bar quotations in the local Italian market, while in January there had been an uptrend, in February the market saw little movement in terms of prices while activity was also slow. However, in the last few days there seems to be stronger pressure for price increases, with market insiders forecasting a recovery of scrap prices in March that will likely have a positive influence on merchant bar quotations.
Currently, local base prices for merchant bars in the Italian market stand at €290-300/mt ($399-413/mt), although the offers may be lower in the case of large tonnages.
On the export side, offers for Italian merchant bars now stand at €580-590/mt ($797-811/mt) CFR for North African markets. The political turmoil in North Africa has caused big concerns for Italian merchant bar suppliers, even though, at the moment, demand from Algeria, Tunisia and Egypt is not bad. Trading relations with Libya are the most difficult, since banks, public institutions and ports in this country are basically inactive at present.
$1 = €1.374