Europe longs: Prices rising
Positive sentiment continued to spread across Europe as increased demand for rebar and wire rod was propped up by the EU stimulus package and rising international prices.
The Argus Italy rebar and drawing-quality wire rod assessments both rose by €10/t, to €610/t ex-works and €690/t delivered, respectively, today.
Demand surged as talks on the EU recovery plan reached their final stage, with construction activity set to rise, an Italian trader said.
Domestic base prices for Italian rebar were reported at €360-370/t today, which equates to €620-630/t ex-works, excluding value-added tax (VAT). Small discounts were still available. Demand is steady despite rising prices, which could reach €390-400/t ex-works for base in the near term, an Italian trader said.
But German mills were heard to be well booked and unable to cover customers' requirements. This pushed local buyers with low inventories to seek other European suppliers, while import opportunities were limited amid exhausted import allocations. Market participants reported that base prices settled at €410-430/t delivered in Germany, equivalent to €680-700/t delivered for 12mm rebar.
Fabricators' prices were heard at €730-770/t across Germany, but the lower end of the range "was gradually vanishing", German participants said.
Increased demand from central Europe meant that Italian producers held back from offering, anticipating sales at higher prices soon. They were also reluctant to offer to overseas markets this week to better evaluate the situation, market participants said.
Demand from the private construction sector has fallen below expectations. A surge in building material prices increased the cost of new buildings by around 10-25pc this year compared with the second half of 2020, pushing investors to delay new projects. The cost of some products nearly tripled and some deemed it unreasonable to invest in new construction projects, a German trader said. But cut-and-bend shops are still running at 100pc capacity, the trader added.
In the wire rod sector, Italian mills were also reluctant to place offers, with some indications heard at €690-700/t delivered for drawing-quality material this week. Tighter supply caused by a few European mills conducting maintenance in May-June and depleted import quotas provided support to higher prices, with market participants anticipating that a mark of €700/t will be breached as overseas offers skyrocketed this week.
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