The Italian rebar market continues to suffer, with quotations still declining and demand not great.
Following the rapid climb in rebar prices in the first quarter of the current year, a vicious circle began which has led to a continuous fall in prices. In recent days, base reference quotations for rebar dropped to a level of €230-240/mt (as given by the Brescia Chamber of Commerce price commission), reaching their lowest level since February 2006.
According to the players in the market, the cause of the decline in rebar prices can be attributed to the excess of offers compared to the level of demand. They go on to add that this excess of offers is due to three principal factors: in the first place, due to the fall-off in demand from Italian end-users; in second place, due to the rise in overseas competition in the North African markets (a trend reinforced by the strengthening of the euro against the dollar) which has caused the flow of exports to the Mediterranean coasts to dry up; and finally, due to the low level of rebar quotations in France, Spain and Germany, which makes it more difficult for Italian producers to sell their goods to these markets.
Taking a look at Italian domestic demand, after a positive trend in the first part of the year, a certain lack of energy is now being noted in the construction sector, accompanied by a decline in demand. This situation is reinforced by the decrease in quotations (which causes buyers to proceed with great caution when making purchases).
Looking ahead to the near future, market players do not appear particularly optimistic. For the moment it seems difficult to foresee an end to the current trend, even if the gap between billet and rebar prices has narrowed, which means that there should be little room for further decreases.