Tensions have emerged in the European longs market this week. Expectations of rising scrap prices on the one hand and supply reductions in the local markets in Italy and Poland on the other hand have led market players to think about a possible, albeit fragile, recovery in prices.
In the local Italian market, in fact, rebar prices have increased by €10/mt on the upper end of the range, settling at €260-280/mt ex-works base (€525-545/mt ex-works including regular extras) and, according to reports, some steel producers could also ask for €300/mt ex-works base (€565 ex-works including regular extras). For this reason, Italian scrap market players had started to hope for a price increase for the raw material, but "the [rebar] price increase is not due to stronger demand, but rather to lower supply", a source at an Italian mill commented. In fact, "the accident in Osoppo has made other rebar producers enthusiastic [...]. Customers, even if they are not convinced, must adhere to this new mood and buy, but still with caution," another source said.
According to what SteelOrbis gathered from market sources, the temporary production stop at Pittini group’s Osoppo plant is expected to last about three weeks. In the meantime, rolling processes are continuing. Therefore, it is estimated that the consequences on production and deliveries, although significant, remain under control.
Meanwhile, wire rod prices announced in Italy for November have been confirmed at €565-580/mt delivered for drawing quality and €545-560/mt delivered for mesh quality, although some market players have reported that there are offers circulating at about €10/mt lower than the mentioned levels. In addition, "it is possible that some producers will attempt to raise their prices after last week's incident," a source said, adding that, however, demand remains subdued in absolute terms, and uncertainty about CBAM and safeguard quotas next year continues to weigh on sentiment.
Difficulties in finding some volumes of wire rod have also been reported in the Polish market. According to some market rumors, in fact, a major producer in Poland suffered a plant failure towards the end of October, causing a delay in production of at least 20,000 mt. However, the company has not publicly made a statement in this regard, so - for the moment - the consequences of this accident remain only hypothetical.
As far as export markets are concerned, ex-mill rebar prices from Italy to other European destinations have been reported at around €520/mt, expecting a stable market in November. Rebar and wire rod from Greece, on the other hand, have been reported at €555-560/mt FOB and €550-555/mt FOB respectively, stable overall compared to the last prices reported.
In the import segment, rebar prices from Turkey to southern European ports have been reported at €500-510/mt CFR, unchanged on euro basis compared to last week but up by $5/mt on dollar basis at an exchange rate of 1.15 on November 6. As for wire rod, prices from Turkey for the same destination have been reported at €510-515/mt CFR, up by €5/mt and $5-10/mt compared to the previous week. Lastly, import prices for rebar and wire rod from Egypt have been reported at €495-500/mt CFR and €500-510/mt CFR, respectively.