News Global Market rebar 31 October 2022
Inventories are declining, and imports of these products to Europe have slowed down
The European long products market is showing some signs of stabilization. Eurometal informs about it with the reference to Kallanish. The latest measures taken by European policymakers have resulted in more sustainable gas prices after sharp fluctuations since the second quarter of 2022.
The uncertainty in the steel sector, according to the source, was mainly due to fears of energy costs and inflation. Currently, energy prices are stabilizing and there is a resumption of large construction and infrastructure projects that have been put on hold.
On the European long products market, stocks for sale are declining. In addition, imports slowed down — according to official EU data, in October 2022, only about 66% of quotas for rebar and 26% for wire rod were used. For comparison, in July, the first month of the third quarter, almost 80% of quotas for rebar and about 46% for wire rod were used. In the coming weeks, the market is also expected to feel more impact from reduced supply from local steelmakers.
Despite some signs of market stabilization, the increase in current prices has yet to be realized. In particular, prices for rebar in Europe continue to decline (they have continued to fall in recent weeks in Italy). However, prices remain above the levels registered when the Russian invasion of Ukraine started in late February. European steelmakers explain that they are not reaching EBITDA from sales at current price levels.
In recent weeks rebar prices fell in most regional markets in the world, in particular in Europe amid weak demand from the construction sector.
As GMK Center reported earlier, some European steelmakers plan to raise prices for delivery hot-rolled coil in the first quarter of 2023. At the same time, the situation on the market is disappointing. Local rolled steel producers continue to offer discounts on products for December delivery in an effort to ensure sales amid low demand.