The European longs market has been characterized by substantial stagnation this week due to multiple factors: the absence of Turkish and North African players for the holiday of Eid Al Adha (Feast of Sacrifice, May 26-30), and the push-and-pull between producers and buyers regarding price levels.
On the one hand, producers are pushing to maintain the current levels and even trying to raise them, while on the other hand, customers are trying to buy as little as possible so as not to support prices that they assess as far too high.
Long steel demand across Europe remains weak, except for a spark in the East, and most market players are waiting to reassess the situation with more clarity once the new safeguard measures come into force from July 1.
In the Italian market, rebar producers continue to ask for €460/mt ex-works base (€720/mt ex-works including regular extras), and according to some sources, there have been attempts to increase prices by €20/mt. However, "there are no sales even at €460/mt [ex-works base], I believe it will be difficult to obtain higher levels. The few agreements that have been concluded are still at €440/mt [ex-works base, €700/mt ex-works including regular extras]," a source commented. "It is now clear that customers will return to purchase no earlier than next week, hoping to get lower prices," another source said.
"The market is flat, the phone is not ringing. There is no demand and there are no prospects of major projects that would shift consumption. We won’t go back to the 2022 scenario," a third source said. Market players in southern Italy have a slightly more optimistic outlook, and they have stated that May has been positive overall thanks to the works related to the PNRR [National Recovery and Resilience Plan] that continue to drive the market. "However, we are also noticing a slight decline in consumption. Customers are not stockpiling, and there is still little clarity and a lot of uncertainty about the international geopolitical situation and the new safeguards," a source said.
Although a good sales pace has been reported in Italy in the wire rod segment, prices for drawing quality remain within the range previously reported by SteelOrbis, and even in this case there could be attempts to ask for higher prices in June in order to keep them at May levels in new deals.
As for the export markets from Italy to Central European countries, some price reductions have been reported, and the market has been described as static: "Everything is too quiet. Customers are cautious, stocks are high and there is little confidence in further price increases," an operator reported.
In Germany, the situation is similar. "Mills are trying to obtain higher prices but demand is still sluggish, the market is resisting," a representative of a local steel mill said. Interviewed about the new safeguard measures, the same source said that he does not see a big impact on the market for now. "It will be increasingly difficult to import, but no one relies only on imports now. The market was already prepared for this event, I don't think it will have major consequences," he concluded, adding – however – that prices will certainly record further increases that the market may not be able to absorb.
As for the import segment, the Turkish, Egyptian and Algerian markets have remained completely absent due to the holidays. Consequently, no offers have been reported.
To conclude, the June outlook in the long steel segment in Europe is for a generalized stalemate, and it is likely that product prices will remain stable at the levels recorded in May in the face of weak demand and abundant supply, especially in the rebar segment.
