In the previous week, producers' official domestic prices for rebar in the local Italian market were at €495/mt ($603/mt) ex-works, but market insiders stated that discounts of €5-10/mt ($6-12/mt) were seen in many actual bookings. Looking at the past week, local producers' official prices have declined to €490-495/mt ($598-603/mt) ex-works for 14-26 mm rebar, which is the lowest price level seen to date in 2012.
Rebar prices in the Italian domestic market, despite several pauses, can be said to have been on a downtrend for the past nine weeks, even if the rate of decline has slowed down in the last five weeks compared to the first four weeks of the period in question.
The outlook for the remaining period before the summer break is quite uncertain. Clearly, the price decrease in the European scrap markets does not help to keep rebar prices firm, while Italian producers are also facing low levels of demand. In this context, market operators consulted by SteelOrbis do not dismiss the possibility of a further price reduction to €485-495/mt ($592-604/mt) or even €485-490/mt ($592-603/mt). Meanwhile, if those few buyers with an order backlog for the fourth quarter of the year choose to replenish their warehouses in this period of low prices, the resulting uptick in demand could block the downward movement of rebar prices.
Italian rebar producers have not seen good activity levels on the export side either. Ex-Italy rebar offers have gone down by €5/mt ($6/mt) in the last seven days to €485-490/mt ($592-603/mt) FOB. As Ramadan is about to start, market activity is generally declining, except for some transactions to Lebanon. Luckily, the euro/dollar exchange rate has boosted competitiveness of offers on euro basis. At the end of last week, the euro/dollar exchange rate declined below 1.24, while in the first two days of the current week it has fallen below 1.23.
€1=$1.22