Rebar base prices are this week at €450/mt ($704/mt) in the local Italian market, while the offering price of medium size rebars for this local market is at a level of €665/mt ($1,041/mt) ex-works, with two-to-three month open account, excluding VAT. The consumption level is still fairly weak in this market; however, thanks to factors such as rising scrap costs and the strong international prices, May expectations are being maintained at high levels. On the other hand, it is reported that the Italian producers, who normally do not keep high levels of scrap in stock, are having problems in sourcing this raw material. For this reason, it is reported that the producers may cut back their production shifts in the coming period. This may provide additional support for the expected May increases. Meanwhile, the Italian producers' price levels in the export market are in a range of €640-650/mt ($1,002-1,017/mt) FOB.
Base prices in the Spanish domestic market have remained unchanged compared to last week, still at a level of €450/mt ($704/mt). Following their early April increase, the Spanish producers may up their prices again due to the rising international prices and scrap costs. Spanish producers have been offering Spanish origin 12 mm B500S rebar to the local market at €690/mt ($1,080/mt) ex-works on actual weight basis with 30-day deferred payment, excluding VAT. Demand is still not strong; however, due to the rising scrap prices and the fact that the international rebar prices are gaining momentum again, prices may register a further upward movement in May. On the export side, Spanish producers are targeting the price level of €650/mt ($1,017/mt) and above.
In the beginning of the second quarter of 2008, price levels in the overall European rebar market have caught on to the international price increase trend in spite of Europe's low consumption level. The fairly high price levels of producers from Egypt, Turkey, Moldova and Ukraine, combined with the lack of export competition from southern Europe to West and North Africa, have helped support prices across Europe. Germany has become the first big market in Europe to pass the €700/mt ($1,095/mt) mark, and may be considered as the only European market with good consumption levels. However, due to the recent price increases in the Turkish and Middle East rebar markets and the rising scrap costs, the rebar prices may pass the €700/mt mark in the overall European market in May.