According to the latest survey of the Italian rebar market by SteelOrbis, the downtrend which started about one month ago seems to have come to an end, as domestic rebar quotations appear to have stabilized at €250-260/mt ($313-325/mt), base. At present, the few transactions concluded are mainly located closer to the low end of this price range, i.e., at the lowest level since the beginning of 2012.
The is no indication of any likely recovery of domestic rebar demand, which is lackluster like current construction industry activity in Italy. Another key factor is the recent lowering of scrap quotations in the international markets (both in the EU and in Turkey), which increases the likelihood of a consolidation of local rebar prices around the current level. On the other hand, once raw material quotations start to improve, Italian long steel producers will not be able to avoid raising their rolled products prices, as they will seek to ensure that their already tight profit margins are not squeezed further.
On the import side, the latest ex-Turkey offers are at $610/mt FOB, but local buyers are not interested in foreign long rolled products amid factors such as low demand, transport costs and delivery times.
Moreover, the approach of Ramadan has almost brought exports to North Africa to a halt. In Italy, market players are operating on a day-by-day basis, while summertime production stoppages will be probably be fairly long. In this context, rebar stocks are very tight both at steel mills and in traders' yards and no one in the supply chain is willing to increase their stock levels as the sentiment for the post-summer period is really poor.