With the resumption of activity in the Italian market after the summer break, domestic rebar producers' offers are at €520-525/mt ($650-656/mt) ex-works, while prices closer to €515/mt ($644/mt) are about to vanish. The current uptrend is attributable to producers' output cuts and to the evolution of scrap prices.
The Italian iron and steel association Federacciai recently issued Italian output figures for June, indicating that long steel production in Italy decreased by 14.7 percent year on year in the given month, after a 6.1 percent year-on-year decline in May. As regards scrap, even if domestic prices are still to be determined, scrap prices in France and Germany increased by over €15/mt ($19/mt) in August, and so it appears that scrap quotations in Italy will also see a similar increase. Market operators consulted by SteelOrbis state that Italian rebar producers will increase their local prices by another €10-20/mt ($13-25/mt) in the next few days, even if construction activity lacks intensity, though they will probably not be able to collect the full uptick.
On the export side, almost all Italian producers' rebar offers are at €510/mt ($638/mt) FOB, though one producer has been offering at €500/mt ($625/mt) FOB. Meanwhile, Algerian demand is still not healthy even though Ramadan ended a couple of weeks ago. This is because local end-users have yet to digest the stocks they accumulated previously. Further observation is needed to see how Algerian demand for rebar will develop over the next few weeks. Italian exporters will also have to monitor the euro/dollar exchange rate as, after falling to its lowest level this year in late July, it indicated an uptrend for the whole month of August.
€1 = $1.25