Price softenings of rebar have last week continued to be observed in the European rebar markets. No bottom point seen in scrap and billet prices as well as low demand and competition have continued to be the main reasons behind softening observed in rebar prices.
In Italy, base prices of rebar have decreased to the levels of €110-120/mt ex-works. As distinct from the past few weeks, little activity in terms of demand has been spoken in the local market last week. Rebar prices were at the level of €320-330/mt ex-works, while various offer levels were heard for export. For the Algerian market, rebar export offers given by Italian mills who compete with Spanish and Greek mills have been at the level of €315-320/mt FOB.
Also, Spain has passed the last week with decreases. As is known, end-user demand has continued to stand at low levels, while Spanish mills have been playing more active role in the export markets. Spanish mills who compete with Italian and Turkish mills in the African market have been focusing their attention to the eastern European market either; however, demand level in that market is at low levels which cannot be compared with the demand from Africa. Spanish mills who had continued to give rebar offers at the level of €320/mt FOB in the previous two weeks, have last week started to give offers at about €310/mt FOB. Scrap prices, demand difficulty and competition are the reasons behind this decrease.
Looking at Greece, it is possible to hear various price levels as in other regions. Decreasing import offers per week have led Greek producers to lower their prices. Especially, offers given from Italy have started to be the main criteria of price decision of local mills in Greece. As for demand, there has been no change observed over the last week. End-user demand has been at low levels in the Greek domestic market.
Export offers given by Turkish mills, who have mainly been exporting to Africa, Iraq and Middle East, have decreased to the levels of $390-400/mt FOB. Last week ex-Europe HMS I/II 70:30 scrap has been booked at $208.25/mt CFR Turkey, which had been booked $219/mt CFR Turkey previously. Meanwhile, Turkish mills who purchase billets mainly from CIS countries have been concluding partial purchases due to continuously decreasing billet prices. Softenings seen in scrap and billet prices have also continued to lead Turkish mills to lower their export offers.
Moving to eastern European side, the situation is not different from the southern European market. In particular Latvian mills' rebar export offers have decreased to the level of €290/mt FOB through the end of the last week. Also, offers given from Belarus to Algeria have stood at €340/mt DAF. Despite these price reductions, buyers' market in the eastern Europe have been moving on a quite sluggish trend in general.
It seems that softenings observed in scrap and billet prices which are the decisive factors of finished steel prices have not come to a halt in the European market. CIS billet prices have declined to the level of €310/mt FOB. Also, it is heard that offers have been given below this level. As is known, downtrend trend seen in scrap prices have also continued. Figures mentioned in terms of scrap collection cost differ from each other. Demand has been trending slack in general. A few market players think that the market has shown its bottom point, while most of them expect that softening will continue in the European rebar markets.
€1 = US$1.26366