This week, the European longs market has showed a substantially stable picture compared to the previous week, but, thanks to warmer weather, energy prices are dropping in most countries. This will certainly have a positive influence on finished product prices in the weeks and months to come. The market fundamentals remain the same - general low availability of ferrous scrap and consequent higher prices leading producers to increase their prices, however low finished steel product demand puts producers in a difficult position in terms of sales.
Rebar orders in the local Italian market are not yet able to absorb the increases desired by producers. The desired level of €340/mt ex-works base (€605/mt ex-works including regular extras) is, in fact, only ideal, because actual deals have been closed at around €290-300/mt ex-works base (€555-565/mt ex-works including regular extras). It is likely that, based on the increasing optimism of the market, levels of around €310-320/mt ex-works base (€575-585/mt ex-works including regular extras) will be reached, but it is still too early to say.
In Italy, wire rod stands at 635-650 €/mt delivered for drawing quality and €605-620/mt delivered for mesh grade wire rod, which mark an increase of about €15/mt and €10-15/mt, respectively.
Regarding possible production stoppages, a source from an Italian mill commented: "The idea I have is that [wire rod] demand will be good, and we will be able to pass on this small increase [in market prices] so that we won’t need to stop. [However, our] customers [...] are closed for Easter, even just to have some time to spend with their families. Since working days are fewer [in April], customers consume less material and therefore steel mills may stop [in turn]".
Rebar have marked increases of about €20/mt month on month in the local market in Germany and Poland, where prices levels stand at around €640/mt delivered.
Wire rod exports to central and eastern Europe stand at €650-665/mt delivered for drawing quality and €620-630/mt delivered for mesh grade wire rod, while in western Europe the same exports stand at €645-660/mt delivered and to €610-620/mt delivered, respectively.
Returning to exports, ex-Greece rebar stands at around €595-600/mt FOB and wire rod at around €590/mt FOB. Ex-Spain rebar to the United Kingdom stands at around €610/mt FOB.
Finally, imports of rebar from Turkey have been reported at €560-565/mt CFR, with wire rod imports at €565-575/mt CFR. Offers from Algeria have been reported at €570/mt CFR for both products, while import offers from Egypt are at around €550/mt CFR for rebar and around €560/mt CFR for wire rod. Notably, one wire rod offer from Indonesia was reported at around €515/mt CFR. All prices are calculated based on the $1 = €0.92 exchange rate (March 27).
