The European longs market has remained "tense and static" this week, with producers’ attempts to raise prices, that continue to fail to appeal to buyers.
In the Italian rebar market, for example, producers have tried to increase price requests by between €30/mt and €50/mt depending on the mill, raising them to a range of €350-360/mt ex-works base (€610-620/mt ex-works including regular extras). However, according to sources, buyers continue to withdraw previous orders at €280-290/mt ex-works base (€540-550/mt ex-works including regular extras). However, volumes available at these prices "are now running out", a source said. "Producers are worried," another source commented. "This war [in the Middle East] is having a major influence, investments have collapsed, people are afraid to spend," he concluded.
Italian producers have chosen to implement various strategies to cope with the high energy prices caused by the war and with demand at an all-time low. Several of them, in fact, have reduced or idled production for varying periods of time, from a few days to over a week, waiting to have a clearer picture of demand.
As far as the wire rod market in Italy is concerned, quotations are still suspended for now. "The situation is tense and demand is still very low. Hopefully local mills will not increase prices too much, otherwise the little demand there is risks disappearing completely," a market player stated. "Demand remains low," another source confirmed. "Just as the conflict in Iran has generated increases in energy - and therefore steel - prices, it is now also stopping demand. Unlike 2022 [post-Covid and war in Ukraine], when the market reacted by holding prices, there is now a lot of uncertainty. The market is not responding," he concluded.
In other European countries, wire rod offers are also temporarily suspended, and a large manufacturer is renegotiating current orders with some customers. As far as rebar is concerned, prices for central Europe are now standing at €580-590/mt ex-works.
Export markets remain silent, while imports from Turkey have recorded some hike attempts due to the influence of freight costs, which are strongly affecting deliveries by vessel. "In addition to the increase in freight costs, deliveries are being delayed by three to four months," a European trader commented. "Ships are simply impossible to find," said another.
Import prices from Turkey to southern Europe this week are reported to be standing at around €530/mt CFR for rebar, up by €10-30/mt week on week, while for wire rod they have been reported at around €540/mt CFR, also up by the same range week on week.
€1 = $1.15 (European Central Bank, March 12)