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European rebar prices come under downward pressure - 3 May 2012

Activity in Europe has been muted, with few rebar transactions concluded owing to the Labour Day holiday, while soft demand and financing constraints are putting pressure on rebar prices which are on the verge of further decreases, Platts Steel Business Briefing learns from market participants.

Prices are reported unchanged since last week, but mainly due to the lack of transactions, with northern and southern Europe rebar prices at similar levels, This is unusual as northern European prices have tended to remain around €20/t above southern European prices.

According to sources in Germany, demand is slowing, with prices in the domestic market around €530-540/tonne delivered. Domestic mills face competition from other European mills, particularly from Poland (see separate article on Germany and Switzerland). One Spanish producer reported hearing Polish mills concluding sales at €520/t delivered, while Spanish material is available at €530-540/t delivered in Germany.

In southern Europe, end-user demand remains weak, with the greatest problems seen in the Spanish market. “The domestic market is too bad, so we are focusing on export, but mainly to Africa”, a Spanish producer says.

In Italy, domestic prices for rebar are reported to be around €280/t base, which mean €530/t effective ex-works, and in Spain €530-540/t effective delivered. However, competition from Central and Eastern European producers is increasing there too.

Some market participants say the weak level of demand for rebar in Europe could lead to further price decreases. However, producers are coming under pressure from rising energy costs to increase extras. Some southern European section and merchant bar producers have announced extras increases in recent weeks.

 

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