Longs steel prices in Europe have remained under upward pressure during the past week. According to market players, price requests are increasing and demand - at least in southern Europe - has improved and is remaining consistent, although buyers are not enthusiastic.
According to reports from players in the local rebar market in Italy, producers continue to seek prices of up to €320/mt ex-works base (€580/mt ex-works including regular extras), but orders are still being closed at around €290/mt ex-works base (€550/mt ex-works including regular extras). However, one source stated, "Livelier scrap and rising operating costs - gas and energy - will force producers to increase prices. €290/mt ex-works base is too low. There is a risk of losing money." In fact, one local producer told SteelOrbis that he already plans further increases next week. "I understand some colleagues’ enthusiasm," a source at another Italian mill commented. "But for the moment I think the key word should be caution. It is true that demand is in line with the season, but sales volumes are still modest," he concluded.
In the rest of Europe, demand for long products seems better than in Italy, with the exception of Poland, where the seasonal cold weather is slowing down both the manufacturing and construction industries.
As for wire rod, prices have also increased throughout Europe, starting from Italy where they have been reported at a minimum of €590-600/mt delivered for drawing quality, up to €610-620/mt delivered. For mesh quality, the range is €580-590/mt delivered. As mentioned by SteelOrbis in last week’s report, in fact, the upward pressure in other steel segments has also influenced the prices of wire rod, for which demand is less affected by weather variations as it is not only used in the construction industry. In Poland, offers for drawing quality wire rod have been reported at €600-615/mt delivered and €585-600/mt delivered for mesh quality, but according to reports, there are not many deals concluded at these levels. Finally, in Spain, a producer was rather aggressive with requests up to €620-625/mt delivered for drawing quality wire rod and €580-590/mt delivered on mesh grade wire rod, the latter being in line with prices in other European countries.
In the export segment, an Italian mill has reported quite high demand from abroad, and also in this case they would gradually plan to increase their sales prices. According to reports, the same mill has concluded at least one deals to Romania and requests have arrived from Germany. On the other hand, no changes have been reported in export offer prices from Greece, which remain at around €570/mt FOB for rebar and €580-600/mt FOB for wire rod, while the price from Spain to UK ports is stable at around €580/mt FOB for rebar.
In the import market, rebar from Turkey has been reported at around €510/mt CFR, unchanged from week on week, whereas wire rod is offered at around €520/mt CFR, also unchanged week on week. Wire rod offer prices from Egypt have also remained stable overall at €555/mt CFR, whereas rebar prices from the same origin have been reported at €495/mt CFR, down €5-10/mt week on week. Finally, Algeria is offering at around €515/mt CFR for rebar and €525/mt CFR for wire rod, up by €15-20/mt week on week. All prices are based on the exchange rate of €1 = $1.17 (European Central Bank, January 22).