Mixed trends have been observed in the European longs market this week, with the rebar segment remaining weak and wire rod prices on the rise due to a lack of availability in local markets. Activity in the export markets remain very slow, while import markets have recorded stability or slight declines in prices due to the absence of players such as North Africa and Turkey.
As far as Italy is concerned, the local rebar market has lost about €10-20/mt week on week, with average offers at around €290/mt ex-works base (€550/mt ex-works including regular extras). "Some are even offering €280/mt [ex-works base, i.e. €540/mt ex-works including regular extras] in order to close a few orders. No one can guess what they [mills] will do in March," a local source commented, reporting a certain pessimism. Demand remains very sluggish and the market is basically at a standstill. One of the most important Italian mills is reporting low sales of reinforcing products, but at the same time it is carrying out the completion of a new rolling mill. "If demand restarts a little, there would be some positivity in the market, but at the moment there is no chance of this happening in the short term," a local trader in Italy reported.
Prices in Italy are on the rise in the wire rod market, but this is mainly due to a shortage of availability of material rather than a real improvement in demand. The first offers in March will probably be at around €610-625/mt delivered for drawing quality wire rod and €595-610/mt delivered for mesh quality wire rod, higher by €10-20/mt compared to February prices. For now, however, there are no deals concluded at these levels.
In Poland, significant delays have been reported in wire rod production, while in Germany the same product is being offered at around €20/mt higher compared to February prices, as SteelOrbis reported last week. In particular, an East German producer is especially aggressive in the market and is not willing to give any discounts.
According to market information, a major producer in Poland has offered wire rod at a much higher price than the current average market price, which would exclude it from competing. The reasons may be partially attributed to the increase in import and raw material prices, which "are having a strong impact on their market position", a source explained.
As for rebar, a source at a Polish producer reports some optimism for March, predicting lower production costs in view of a possible drop in scrap prices.
As anticipated, the export market from the EU is not experiencing significant movements, while in the import market a stable or slightly declining trend has been observed due to the absence of key markets such as North Africa and Turkey, which have slowed down due to Ramadan. According to the latest official information, rebar prices from Turkey are standing at €485-500/mt CFR, whereas wire rod prices are being reported at €500-515/mt CFR. In this case, however, workable prices seem to be lower, at around €495-510/mt CFR. All prices are down by around €5-10/mt week on week.
€1= $1.18 (European Central Bank, February 26)