According to market operators in Italy consulted by SteelOrbis, during the past week steel rebar prices in the Italian domestic market have fallen by €10-15/mt ($13-19/mt) compared to the first week of May. The current average base price for rebar in Italy is around €270/mt ($343/mt) ex-works, excluding VAT.
Key factors for rebar price negotiations in Italy are payment terms and also the estabilished business relationships between buyers and sellers. Currently, the market is mainly oriented towards spot orders. In addition, rebar stocks are at minimal levels, as the end-user side does not have much confidence in construction activity and their purchases are mainly aimed at satisfying their immediate needs.
In fact, construction activity in Italy is really scarce. The month of April was lackluster also due to the rainy weather and holidays, while in the first week of May some players sensed a revival in the volume of inquiries, but not on the pricing side (though the most skilled sellers sold some batches at above €280/mt base). Meanwhile, the increase in market activity quickly vanished as buyers withdrew, and so prices came back down to current levels.
For the remainder of May, rebar prices in Italy are likely to follow a sideways trend, also because the firmness of scrap quotations in the current environment has squeezed long steel producers' profit margins. According to reports in the market, in order to avoid a further tightening of margins, domestic rebar producers could hike their surcharges, but no official announcements have been made so far on this issue.
€1 = $1.27