The situation in the southern EU longs market has once again failed to show any improvement - there are still few orders and requests for lower prices from customers, while mills are forced to make some production cuts in order to balance supply with demand. Some sources comment that the price bottom has almost been reached, while others are more pessimistic and assume prices will weaken further.
Steel mills are halting production due to a lack of orders and are to aiming to bring down scrap prices, but they still have high inventories that allow sales to continue. "The time will come when there will be a shortage of material and the market notices it," said one Italian producer. "It will be then that prices can rise, but not before," he added.
In Italy, the local price of rebar is at €400/mt ex-works base (€665/mt ex-works including regular extras), which has been relatively stable over the week. Some buyers, according to sources, are asking for levels even €20/mt lower for their orders. In the wire rod segment, Italian domestic prices have fallen by €40/mt to €630-640/mt delivered. It is also worth mentioning that on average across Europe drawing and mesh quality wire rod prices are at €650/mt and €630/mt, both on delivered basis. In Spain, however, the latest domestic wire rod prices have been heard at €615/mt DDP. "I think they may be even lower now, because there is very weak demand," a Spanish trader told SteelOrbis.
In the export market, the situation shows no signs of recovery either. Ex-Italy offers have been reported at around €580-590/mt FOB for rebar, but buyers are even asking for €560/mt FOB, and €560-580/mt FOB for wire rod. Ex-Spain offers are reported to be at around €590-600/mt FOB for shipment to the UK, according to sources.
On the import side, Algerian rebar is now at $605/mt FOB (€590/mt CFR southern Europe), while Egypt is offering rebar at $570-580/mt FOB (€558-568/mt CFR) and wire rod at $575-585/mt FOB (€563-572/mt CFR). Ex-Asia wire rod offers are on the lower side, at $530/mt FOB (€550/mt CFR) from Indonesia and $540-545/mt FOB (€558-564/mt CFR) from Malaysia.