The longs market in Europe is now characterized by weak demand: in Italy this has caused lower prices for both local rebar and wire rod, while in the EU buyers seem generally perplexed and suppliers are only able to sell small volumes.
Local Italian rebar prices have fallen from last week's €580/mt ex-works base to €530-540/mt ex-works base (€795-805/mt ex-works including regular extras), thus marking a drop of €40-50/mt week on week. According to most sellers, demand is quite low and buyers still seem reluctant to buy.
In the wire rod segment, the prices for SAE1006 grade stand at €700-720/mt DAP North Italy, down from last week's offers (€740/mt DAP Northern Italy), when, however, according to one source, the workable price range was already at €680-700/mt DAP.
The situation has prompted some sources to expect a further drop. "Making forecasts is difficult as always, but unless something unpredictable happens at the moment, I think the price will still give up something," said one Italian trader. "In my opinion, we will have, between now and the next fortnight, a slight decrease," another trader told SteelOrbis. Some market sources, on the other hand, believe that prices will remain relatively stable until the end of January, but almost everyone agrees on a likely increase in early February.
In the export market, Italy is offering mesh quality wire rod at €680-700/mt DAP throughout Europe, while drawing wire rod is at around €700-730/mt DAP. Mesh quality was reportedly offered at €690-700/mt CPT Central Europe and €680-690/mt CPT Poland, while drawing quality wire rod was reported at €690-700/mt FCA for eastern Europe. Prices ex-Spain for wire rod are at €720-730/mt delivered eastern Europe.
In the rebar export segment, demand is almost absent, but the price from Italy stands at €690/mt FOB for rebar, up from last week. The export rebar price from Italy to Europe by truck stands at €670-680/mt ex-works plus transport prices. In addition, other sources have reported an ex-Italy offer at €670-700/mt FCA eastern Europe.
"The forecasts were perhaps overly negative," said an important Italian producer. "The first half of the year will be difficult, but probably not as bad as expected two or three months ago. Demand is not exceptional, that’s true, but better than expected," he added.
From Greece, offers have stood at €690/mt FOB for wire rod and €660/mt FOB for rebar, but one producer said, "We have not been able to book sufficient quantities and buyers are perplexed because they have noticed a “discrepancy” between production costs and the downward trend in prices at most mills. This situation is freezing the market and we have once again entered a wait-and-see mood." In fact, according to sources, the week was characterized by small volumes and expectations of lower prices.
In the import segment, there are active offers at acceptable levels, and this makes it hard for the local EU sellers to compete. The prices from North African countries, in particular, are falling because they are offering for March-April production, the Ramadan period, in which their local demand will be much lower, and they will be under more pressure to export.
From Algeria, offers are at $645-650/mt FOB for rebar and $660-665/mt FOB for wire rod, while from Egypt the prices are within the $645-660/mt FOB range for rebar and $650-660/mt FOB for wire rod. The most recent sea freights from North Africa to the southern EU are at $35-40/mt for medium lots. The latest offers from Asia stood at $705/mt CFR Europe, up $5-15/mt over the past week. From Turkey, the offers for rebar are at $700-710/mt FOB, with the lowest heard at $690/mt to Bulgaria; ex-Turkey offers for wire rod have been standing at $710-720/mt FOB.