The European longs market has continued to see upward pressure on prices this week, although buyers still remain rather cautious overall.
In the Italian rebar market, producers’ requests have been reported in a range of €320-350/mt ex-works base (€580-610/mt ex-works including regular extras), increasing by €30/mt week on week on the higher end of the range and by €10/mt on the lower end. Most contracts, however, continue to be closed around the lowest price indication, as "customers are not willing to buy at higher levels", a source said, adding, "However, they will have to give in, sooner or later." The representative of a major Italian mill commented, "Rarely have there been such strong signals of price increases in recent years… although some customers have full warehouses and they can still wait to buy, they cannot ignore that prices are due to rise further." A source at another Italian mill reported a hypothetical increase by €10-15/mt on March sales. Despite this, a certain resistance seems to be emerging from rebar buyers, who are maintaining a cautious and wait-and-see attitude. It is also worth noting the slowdown in the production of another Italian mill, which, according to some unconfirmed rumors, has suffered a failure at a furnace.
A similar situation has emerged in the German rebar market, where the price requests from mills have increased further, but have encountered some resistance from buyers in the local market. "The market in central Europe is struggling to restart, also due to winter conditions," a source said, adding, "They say it's the coldest winter in the last 15 years."
Market players in the wire rod market, at least in Italy, are more cautious. While admitting the upward pressure caused by the supply shortage to which CBAM is contributing, sales have not been brilliant since the beginning of the year. Meanwhile, prices continue to stand in the range of €600-620/mt for February deliveries, but slightly higher prices have been reported for the rare delivery requests for March.
Moreover, the decision of an important Italian mill to reduce extras for electro-welded wire mesh by €20/mt in order to shrink the gap with rebar prices is also causing discussions in the Italian longs market. "The decision has been made to stimulate sales of electro-welded wire mesh, as the previous price gap caused customers in the construction segment to prefer to buy rebar instead of mesh," a source at the same mill said. One trader, however, called this choice "shareable, but rather peculiar in the current historical moment."
As for the import market, longs prices from Turkey have decreased compared to last week. For rebar, official offers have been reported at €485-500/mt CFR, down by €5/mt on the lower end of the range, whereas wire rod offers are at €500-510/mt CFR, but for both products workable prices appear to be lower, at around €480/mt CFR and €490-500/mt CFR, respectively. Offers from Egypt have been reported at €485-490/mt CFR for rebar and €490-500/mt CFR for wire rod, both down by about €5/mt week on week, for March shipment. Finally, wire rod prices from an Algerian mill have been reported at €485/mt CFR, also down by about €5/mt week on week for March shipment.
