As Buyers Switch to Imports, The Prices of Italian Steel Wire Rod Plunge
- 20-Sep-2022 4:16 PM
- Journalist: Patrick Knight
Germany: Italian Steel Wire Rod prices have been falling this week amidst skyrocketing energy prices. All Steel manufacturers are reducing their production on alternate weeks basis due to prohibitive energy costs and to balance demand and supply. Domestic suppliers have raised Steel Wire Rod prices by USD 50/MT compared to August, but the action has been ineffective thus far, and consumers have resumed purchasing material at August prices, which range from USD 671-682/MT base ex-works. Manufacturers claim that only a few transactions have occurred at USD 722/MT ex-works base prices and only for small tonnes. Service centres and distributors resist new price increases because terminal users do not accept the high costs. Market participants say buyers have opted for a wait-and-see attitude as their stocks remain moderate to high. As a result, consumers are refusing to buy at higher prices.
According to manufacturers, downstream demand for Steel Wire Rod sections has remained flat since the market resumed after the August holiday break. However, producers are raising Steel Wire Rod prices by USD 50/MT for the second time this month and are asking for USD 1,310/MT this week due to high energy costs. However, sales activity has yet to resume following the August break. Buyers are not purchasing domestic materials for October. Some players state that manufacturers have only a few orders for September and are refusing to commit for a more extended period. Steel producers claim that quoting has become difficult for mills since energy prices have risen in Italy.
According to our sources, domestic Steel Wire Rod quotations have surpassed the buyer's purchase limit. As a result, terminal users are booking quotations from overseas at a lower cost despite purchasing in their domestic market. In late August-early September, many customers booked large volumes at previous prices, and demand was primarily from the construction sector.
Since last week, several overseas Steel wire rod transactions have occurred in European countries. Malaysian material was booked at USD 670-700/MT CFR, with an Algerian wire rod secured the previous week at USD 690-710/MT CFR. However, this week offers for Algerian wire rods were heard up to USD 755-765/MT FOB. Other north African suppliers sold wire rods for USD 725-735/MT FOB, with Egyptian material currently being negotiated.