Europe longs: Market quiet amid summer lull

European long products prices remained flat this week amid a quiet market during the summer holiday period. But sentiment was mixed following a drop in the international scrap market and strong prices in central Europe.

The Argus weekly Italian rebar and drawing quality wire rod assessments were unchanged at €765/t ex-works and €840/t delivered.

Rebar prices in Poland and Germany settled at €890-920/t delivered in late July with €10-20/t discounts suggested to be available for larger tonnages. But trading was slower ahead of the holidays. Italian producers continued to secure sales at high prices to these outlets, at least €70/t higher than bookings reported to Balkan customers a few weeks ago. But they were unable to achieve above €800/t ex-works in Germany as they faced competition from local producers. German producers are more flexible in terms of tonnages and other terms, including a wider range of specifications and faster deliveries, a European market participant said. Moreover, logistics issues complicated shipments from southern European sources.

At the same time Italian mills faced significant resistance from Balkan buyers, who were able to obtain rebar from regional suppliers at €700-710/t cfr delivered. Balkan buyers were unwilling to pay above €700/t cfr for European material, while Italian mills were targeting at least €700-710/t fob, on par with the latest sales, a European player said.

In the domestic market some sales were reported at €760-765/t ex-works for Italian rebar, with offers heard up to €785/t ex-works, excluding VAT. But trading was slow as buyers anticipated that rebar prices would follow the downward trend in the international market. But it is unlikely that prices will fall significantly, an Italian source said. At the same time, central European mills were well booked.

There was limited availability for rebar in coils, being quoted at €30-40/t over rebar from European mills. In the wire rod segment, Italian producers were largely sold out, with tradeable values indicated at around €800/t ex-works for mesh-quality wire rod and €840/t delivered for drawing quality material. Wire rod from Turkey and CIS could be purchased at $800-810/t fob this week, with offers $10/t higher. But due to limited import quotas and tight supply, European producers do not anticipate significant downward pressure on their prices from overseas markets.