Different trends continue to be observed in the European longs market this week, with no major changes in the overall sentiment. However, an accident occurred at Pittini Group’s Ferriere Nord industrial site in Osoppo (Northeastern Italy) in the evening of October 29, and this event, according to some sources, may have consequences on the markets, in particular the Italian one, in the coming weeks.
Local rebar prices in Italy seem to have responded well to the increases proposed last week by some producers, stabilizing upwards at €260-270/mt ex-works base (€525-535/mt ex-works including regular extras). "We have to recover the margin losses of September," a source at an Italian steel mill said. "New prices are holding firm, we could try a further increase."
According to another market player, this further increase could in fact materialize, given the temporary production stoppage that affected the Pittini Group plant in Osoppo following a fire at an electrical transformer. "It is too early to assess the extent of the damage," he said. However, another source observed this will be a variable to follow and to consider for the possible influence it will have on the finished steel volumes generated in the market.
In the wire rod segment, on the other hand, decreases in November prices are expected compared to October prices, both in Italy and in the central and eastern European markets. "The market in central and eastern Europe is not responding as it should," a market player commented.
To this regard, average decreases by about €10/mt on current wire rod prices are expected. In particular, wire rod prices in Italy could decrease to €565-580/mt delivered in November for drawing quality and €545-560/mt delivered for mesh quality. In central and eastern Europe, on the other hand, November wire rod prices could remain mostly unchanged compared to October for mesh quality at €550-560/mt delivered, but suffer a drop by about €15/mt on the upper end of the range for drawing quality to €560-575/mt delivered. In Germany, a drop by €10/mt is expected on the prices of drawing quality wire rod to €575-590/mt delivered and by €5/mt on the lower end of the range for mesh grade, to €550-565/mt delivered.
Finally, in the import segment, rebar prices from Turkey have decreased slightly on the upper end of the range compared to last week, thus settling at slightly over €495/mt CFR also due to the little change in the euro-dollar exchange rate which stands at 1.155 today, October 31. Turkish wire rod prices to Europe, on the other hand, have remained unchanged at €505/mt CFR, despite the $5/mt downwards adjustment recorded week on week.
