European Steel Rebar Prices Remain Subdued as Mills Compete for Orders
- 05-Dec-2022 4:07 PM
- Journalist: Patricia Jose Perez
During the week ending December 2, 2022, the Steel Rebar prices in the European market continued to plunge as mills cut offers even further to attract demand. According to market participants, Steel Rebar trading activity has been hampered by low demand and an uncertain outlook. Scrap and energy costs have surged through late November 2022. Manufacturers claim that further price reductions would make costs unworkable for Steel Rebar mills because producers would sell below production costs. The majority of market participants believe the price has reached the floor.
Local Steel Rebar suppliers have heard that mills may raise prices as they anticipate higher costs in January. As a result, mills have two choices: reduce production or raise prices. Currently, downstream demand is prolonged. The market consensus is that conditions will remain unchanged until the end of the year. Few trades occurred due to limited inquiries and a wait-and-see attitude among market participants. Due to the low demand, production cuts have yet to impact prices significantly. Some mills planned to keep Christmas production shut down for longer than usual. According to our sources, the Steel Rebar market remains pessimistic about the impact such extended curtailments would have on prices, given that supply still vastly outnumbers the demand.
Meanwhile, manufacturers claim that the current Steel Rebar price does not even cover the cost of production for Steel Rebar, and scrap costs are rising. Steel Rebar delivery was difficult in December 2022 due to the short working month because of the holidays. Manufacturers advise customers to buy at current prices for January or February delivery rather than wait, as the market expects prices to rise. On the other hand, Steel Rebar prices for ex-works Italy settled at USD 839-890/MT.
As a result, ChemAnalyst expects Steel Rebar prices to remain stable towards the end of Q4, as Steel Rebar mills will be unable to continue offering discounted prices if input costs rise. Steel rebar prices have reached a market low, and buyers are aware of this. Mills cannot go any lower as energy and scrap prices rise. Prices are thus expected to remain stable.