After trending at €500-520/mt ($640-665/mt)FOB for quite a long time, ex-Europe rebar prices have seen erosion on the upper end, declining to €500-505/mt ($640-646/mt) FOB.
The deterioration in the global and national financial markets is also hitting the market for iron and steel, one of the major basic commodity markets. The increased risk of a possible exit by Greece from the euro zone has caused the euro to weaken and this is also negatively affecting the international money markets. In this overall context, the euro declined to its lowest level of the past three months as of yesterday, May 14. Today, the €/$ exchange rate is standing at about 1.279 and it is predicted that it may decline to 1.27 with a further weakening of the euro against the US dollar.
The weakening of the euro not only worries economists, but the European steel industry is also very concerned. Rebar demand in the Italian and Spanish domestic markets is fairly low even though the current season is traditionally the strong season for demand, and market players are unable to foresee any improvement in the short or medium term. It is thought that European origin rebar prices, which have declined to €500/mt FOB for the first time in a long time, may even drop below this level.
€1 = $1.279