Rebar quotations in Italy have registered a further slide over the past couple of weeks. According to the players in the market, the current decline is caused by several factors. In the first place, it is caused by the drop in demand. Traders are less interested in purchases and are more eager to sell off what material they have in their warehouses; meanwhile, end-users are only making odd purchases, restrained by the drop in consumption in the construction sector and also by problems of a financial nature.
In second place, there has been a halt to the export trend observed in the first part of the current year - a trend which had functioned as a relief valve for the Italian steelmakers. It is reported that Algeria has stopped purchases of Italian rebar on account of the production slowdown linked to seasonal factors and due to the excessive stocks accumulated in recent months.
Finally, the cost of scrap has also decreased. In the last month this raw material has undergone a slight correction in prices, which has been reflected in the prices of finished steel.
All these factors have led to a drop in the price of rebar in Italy's domestic market to a base price range of €580-590/mt, i.e. €30/mt less compared to the level seen at the start of July.
As regards predictions for the near future, opinions differ. Some players think that the current weak period will last until the end of the year, due to the indications of a correction coming from the international market. Others, on the contrary, think that a change of direction may be seen from the second half of September onward. According to some experts in the sector, the price of scrap could come under upward pressure and this could lead to a rise in quotations of rebar. Besides, currently distributors' inventory levels are medium-to-low and this will oblige traders to recommence their buying activities in September-October. This expected growth in demand for rebar could result in increased price levels.