The European long steel market has remained mostly stable this week, with the exception of Italy, where rebar prices have been subject to strong volatility.
The Italian rebar market is going through a phase of elevated pressure, with steel mills rapidly changing offer prices hoping to stimulate the purchases of consumers, who continue to be cautious. Material supply remains at high levels, while local demand - also due to bad weather - remains rather sluggish. Even though Italian steel producers had asked for €320-350/mt ex-works base (€580-610/mt ex-works including regular extras) last week, in recent days they have lowered their offers to €320/mt ex-works base (€580/mt ex-works including regular extras). According to traders, however, most orders have been closed in a range of €300-310/mt ex-works base (€560-570/mt ex-works including regular extras) depending on the size of the order. Finally, there would also be agreements at lower levels. "There is a lot of noise about prices," said a source at an Italian manufacturer.
No significant change has been observed in the Italian wire rod market, which has remained stable for several weeks in a range of €600-620/mt delivered for drawing quality wire rod. "It’s mid-month. February sales are over and it is still early for March offers," a source at a major Italian producer said. However, according to a trader, the same mill and another Italian mill have tried to ask for €630/mt delivered, but the market does not seem receptive to this level, for now.
As for other European countries, such as Germany and Poland, the market is remaining stable. Producers in Germany are not rolling back from the increases of €20/mt they had recently requested, while the market in Poland is still very slow due to harsh winter conditions. According to a source, rebar and wire rod offers from the largest producers in Poland are unworkable at the requested levels.
As regards the export market, rebar offers from a Greek producer have been reported at €580/mt FOB, whereas its wire rod prices are standing at around €585/mt FOB. No movement is coming from Spain, and, according to SteelOrbis’ information, even the Italian export market by sea is silent after an important Italian rebar producer concluded some sales to Bulgaria at the end of January or beginning of February. As far as overland exports are concerned, however, steel producers in Italy are showing their willingness to increase prices by about €15-20/mt.
Finally, the import market is rather stable, but CFR-based prices have increased week on week due to the slight change in the euro-dollar exchange rate, which has fallen by a few points compared to last week. Rebar prices from Turkey are standing at €495-565/mt CFR, whereas wire rod prices are being reported at €505-520/mt CFR. In this case, however, workable prices seem to be lower, at around €500-510/mt CFR. Offers from Egypt are being reported at €495/mt CFR for rebar and €500/mt CFR for wire rod, but trade activity in Arab countries is currently rather slow due to the beginning of Ramadan.
€1= $1.18 (European Central Bank, February 19)
