A slide in rebar prices has begun to be observed in the Italian market. Both from chamber of commerce reference prices and from observations of what is going on in the marketplace, all indications are that rebar prices have decreased by around €30/mt over the past two weeks. Nevertheless, especially when looking at the import situation, the new steel export tariffs announced by China must be kept in mind.
Currently, the price of domestically-produced rebar destined for the internal market is in the region of €510/mt. This is an average level, but prices now cover a wider range than they did in recent months. Turning to look at the export situation of Italian rebar, material for Algeria is in a price range of €450-455/mt FOB - a rather weak quotation but one which guarantees continual shipments to the North African country, where the market is growing in strength in the current period.
Diverse reasons are being put forward for the decline in rebar prices, though it would have been rather unrealistic to believe that the record levels reached recently would not sooner or later lose ground.
The key to reading the situation is without doubt the slowdown in apparent demand. The early arrival this year of very favorable weather conditions has meant that the large-quantity rebar purchases, typical of the late spring and summer, occurred two or three months earlier than normal. In addition, the continual increase trend had provided an extra incentive to conclude early purchases. At present, we have reached a turning point though nothing is certain either regarding the duration or the extent of this new downward phase. Domestic demand now seems weak and there is an absence of public works that could have boosted demand and prices. Furthermore, the slow decline in prices also has the effect of encouraging purchasers to put off placing their orders for as long as they can.
If we look upstream to the billet market, we notice a drop of $25-30/mt in the course of the past month. Prices are now at €420/mt delivered for Italian-produced billet, and at $540/mt CFO for imports. This decline has stopped, however, and quotations now seem to be more stable.