The downturn in the steel scrap segment has resulted in lower rebar demand in Germany and buyers have started to put pressure on suppliers, asking for discounts. For now, the mills have managed to keep prices relatively stable over the past two weeks at €650-680/mt ex-works, but deals have been heard only at €650/mt ex-works, while the upper end of the range is considered not to be workable.
In terms of demand, 2021 has started at a slower pace than initially expected, taking into account the negative effect of the renewed Covid-19-related restrictive measures. "Before the declines in scrap prices, many market participants already thought current price levels were too high and risky. Now everybody is extremely careful and instead of buying they are looking for discounts. We certainly believe prices will see a correction soon," a trader told SteelOrbis. Moreover, market sources believe that, even if the restrictions are eased, longs prices are still set to decrease due to the scrap market situation. “But we do not expect sharp declines because market stocks are still low for rebar in Germany," another trader said.
In the export market, prices have also remained unchanged at €640-650/mt FOB, but the level is expected to be corrected downwards as it has been found unworkable by buyers for a while now.