Amid the generalized slowness in all European steel markets, from recycled steel to flat steel, the longs steel segment in Europe has also remained sluggish with a slight downtrend in the past week. However, rumors of a possible recovery are emerging, at least as far as rebar prices in Italy are concerned.
Taking up the words of the representative of one Italian steel mill and comparing them with the opinion of one of his counterparts, the common ground among Italian steel producers is to expect rebar prices to recover. Both sources said that the increase in electricity prices is having a major impact on production costs and so they doubt that such a low level can last much longer. According to reports, local rebar prices in Italy are standing at €240-250/mt ex-works base (€505-515/mt ex-works including regular extras), down by about ten $10/mt week on week on the lower end of the range. Although electricity prices have roughly returned to the levels seen at the beginning of June, standing today, June 27, at €118/MWh, after the peak of €135/MWh recorded on June 23, there is no doubt that they are the highest in the entire European Union: in the past week, average electricity prices in Italy have reached €126/MWh, compared to €57/MWh in France, €93/MWh in Spain, and €61/MWh in Germany.
In addition, a logistics crisis is seen in the Italian longs market. "The shortage of trucks is more severe than any other year, and waiting too long [to buy] would mean customers will not be able to receive their orders on time," a spokesperson for an Italian mill commented. According to a local trader, however, it would be the excess of rebar supply that leads end-users to maintain low stocks and place punctual orders, as they are aware they can receive the material in a short time.
However that may be, it is likely that these factors, combined with imminent production stoppages, will produce a price increase in the Italian longs market, where for now wire rod prices remain stable at €620-635/mt delivered for drawing quality wire rod and at €605-620/mt delivered for mesh quality wire rod, unchanged week on week.
No change has been detected in export markets, where the average prices of rebar and wire rod from Greece have been reported at €575/mt FOB and €570/mt FOB respectively, unchanged week on week, and rebar export prices from Spain to UK ports have been reported at around €550-555/mt FOB, also unchanged compared to last week.
On the other hand, import prices of rebar and wire rod from Turkey have declined, standing at €480-490/mt CFR and €490-495/mt CFR, respectively. This figure is down by €10-15/mt week on week and by about $10/mt week on week, also due the fluctuations in the euro-dollar exchange rate, which, according to the European Central Bank, stood at €1 = $1.17 on June 26.