A softening trend has been observed in recent days in the European rebar markets. Since many construction sector projects in Europe have been cancelled under the impact of the global financial crisis, overall European rebar demand is hovering at fairly low levels. Additionally, the rebar market has tightened significantly mainly due to the exchange rate problems in some Eastern European countries such as Bulgaria, Romania and Poland. The exchange rates in these countries are changing even on an hourly basis, with the local currencies depreciating against the US dollar. As a result, local producers are revising their price levels continuously in Eastern Europe and, thus, demand from the region for imported material is declining. In the recent period, delays have been announced in some important investment projects in Eastern Europe, thereby negatively affecting the rebar markets in the region.
Similar to the demand situation in Eastern Europe, problems as regards demand are also seen in southern European countries such as Spain, Italy, Portugal and Greece. Rebar demand in the local markets of Italy and Spain is currently at very low levels. Thus, these countries have turned their attention to the export markets and are offering rebars to Algeria at price levels of €360-370/mt ($463-476/mt) FOB. Meanwhile, it is heard that while Spanish producers are giving rebar offers to Bulgaria they are giving billet offers to Turkey. On the Portuguese rebar market side, competition between local and import rebars is causing price levels to go down. With the softening of imported rebar prices in the local Portuguese market, the local rebar price level is currently at €395/mt ($508/mt) delivered to customer. Similar to Portugal, rebar prices have also softened in Greece, to levels of €430-440/mt ($553-566/mt) delivered to customer. In spite of such softening movements seen in rebar prices, buyers are still hesitating to purchase due to the weak end-user demand.
In general, European countries are feeling the full impact of the financial crisis. Thus, construction sector in the region is slowing down and rebar demand is currently at low levels.