The prices in the Italian domestic rebar market saw a further decrease during the past week. The price level of rebar in the local Italian market is at around €415-420/mt ($588-595/mt) delivered to warehouse in northern Italy, on actual weight basis with 60-day open account, excluding VAT. Base prices even as low as €210/mt ($297/mt) can be seen in the market at present. Traders in the Italian domestic market have been trying to keep their stock levels at a minimum due to the continuously declining prices. Also, they have long been concluding purchases and sales with a view to catering only for their daily needs.
The price level of export offers is at €410/mt ($585/mt) FOB at the moment. However, due to the weak market, traders' expectations are in the direction of slightly lower prices. Although the Ukrainian export prices dropped down to $515-520 FOB in early October, the Ukrainian producers do not seem like potential challengers to their Italian counterparts in the Algerian market. However, aggressive producers from other European countries, such as Spain and Bulgaria, have been putting pressure on the Italian producers in the North Africa market.
The situation in the Spanish domestic rebar market is the same as the situation which prevails across Europe in general. The producers have lower prices compared to the levels in September, in which month they had tried to increase their prices. The price level of B500S 12 mm rebar in the local Spanish market is at around €475-480/mt ($678-685/mt) delivered to warehouse for 30-day deferred payment, excluding VAT. The current base transaction prices are at €260/mt ($370/mt). However, a price level of €255/mt ($363/mt) could also be seen in the market. The producers have been more aggressive in the export market as a result of the quite slow demand in the Spanish domestic market. The offer range of €400-410/mt ($571-575/mt) is currently heard.
The price level of A500 12 mm rebar in the local Portuguese market ranges between €430-435/mt ($614-621/mt) delivered to warehouse on actual weight basis with 60-day open account, excluding VAT. The Portuguese domestic rebar market is considerably slow. Spanish producers' offers to Portugal are at a price level of €420/mt ($600/mt) delivered to warehouse.
Turkish offers at the level of $560-570/mt FOB are not threatening at the moment, especially as regards southern Europe. Also, the mentioned offers have not been putting additional pressure on the overall European markets as they are already sluggish.
At present, offers of Belarusian-origin rebar are at a level of $525-530 FOB Baltic Sea, while offers of Moldovan-origin rebar are at a level of $520/mt FOB Black Sea. These prices indicate that the southern and the northern European rebar markets are also not doing well at the moment.
The European rebar market has been quite calm since May this year. The European market which was very strong throughout 2006 and in the first half of 2007 has been in a downward movement in the third quarter of 2007, with only some occasional upward jumps. The increasing production capacity and the decrease in demand appear to be the main reasons behind the downward movement mentioned above. However, the market is wondering how long producers will be able to put up with these increases given the high levels of raw material costs.