Germany
The German steel market attracted attention this week, with HRC prices decreasing from EUR 575 to EUR 565. However, CRC prices remained stable at EUR 725. These price fluctuations in Germany are seen as a reflection of lack of demand and oversupply across the market. Despite keeping prices low, German steel producers report that sales remain sluggish. Local steel service centres and distributors in particular are reluctant to replenish their inventories due to low demand and further price decreases are expected. However, no official decision has yet been taken to reduce production, as this would lead to a loss of carbon allowances.
Rebar prices in Germany were stable at EUR 635 at the beginning of October. Construction activity in the country remains relatively stable, which has led to no major fluctuations in prices. Behind this stability, however, local producers are facing increasing cost pressures. High energy prices and labour costs make it difficult for German manufacturers to compete globally. Cheap imports, especially from Asia, continue to put pressure on local demand in Germany.
E40 scrap prices in Germany remained stable at EUR 380. This stable trend is attributed to the relatively stabilised supply-demand balance in the scrap market. However, the rise in energy costs continues to make itself felt in Germany as well, creating a particularly challenging period for steel producers. Higher costs, while keeping scrap prices stable, are increasing production costs and increasing the pressure on mills.
14-40 mm steel plate prices in Germany also started the week on a stable note. Prices have stabilised at EUR 575 and steel plate prices are recorded at EUR 700. Germany's energy costs and production process constraints have largely stabilised prices at these levels. However, the stagnation in demand suggests that prices are unlikely to rise significantly in the short term.
Poland
Rebar prices in Poland suffered a remarkable decrease in early October, decreasing to 603 EUR at the beginning of the month. The Polish market, which started the new week with a decrease of EUR 7, faced weakening demand and import pressure. Particularly in the cut-and-cut market, demand has been decreasing due to the change in the format of construction projects. As construction sites are shifting more towards cut-to-length rebar instead of flat bars, demand pressure is causing prices to decrease. In Poland, the wire rod market started the new week with a decrease of EUR 30, bringing prices down to EUR 600.
Wire rod prices in Poland started the week with a sharp decrease of EUR 30 to EUR 600. This decrease is rumoured to be linked to excessive stock levels and weakening demand in the region. Poland's steel market has been witnessing a steady decrease in prices in recent weeks due to lower demand. Demand for wire rod, in particular, has been in serious decrease due to the slowdown in the construction sector and the general economic recession. Producers are expected to announce further price cuts to reduce inventories and stimulate demand growth.
Italy
After the pause in August, demand for both long and flat steel has not increased sufficiently. Distributors report that customer activity has decreased and margins have fallen significantly.
End-users prefer to buy from the import market rather than the domestic market in order to reduce costs. Hot rolled coil prices in particular have been underperforming, decreasing below €550/t ex-works. This is in line with the decrease in coil prices in both domestic and international markets. In Italy, current HRC prices were recorded at EUR535. Moreover, the 2-3 mm HRC market also witnessed a decrease of EUR 20 and prices were traded at EUR 540. CRC prices, on the other hand, decreased by EUR 30 and traded at EUR 680. Galvanised steel coil prices in Italy similarly decreased by EUR 31 to EUR 789.
Rebar prices in Italy started the new week with a decrease of EUR 10 to EUR 570. Weak demand in the country and cheap imports pressurising the market led to a downtrend in prices.
Wire rod prices in Italy, on the other hand, held steady at EUR 620.Italy has been faced with imports of rebar, especially from North Africa and Asia. This situation causes local producers to be unable to compete in terms of cost and to struggle in the domestic market.
Prices of 14-40 mm steel plate in Italy decreased by EUR 25 to EUR 650 in the week. This decrease is rumoured to be directly related to the pressures of decreasing demand and high energy costs across the country. In recent weeks, Italian steel producers have been struggling to keep prices stable, especially in the plate segment. The possibility that some local producers may resort to production restrictions to offset increasing energy and raw material costs is being considered. Nevertheless, demand for plate remains weak, indicating that prices have the potential to decrease further.
It is observed that the scrap market in Italy is also under similar pressure. E3 scrap prices decreased by EUR 15 to EUR 313 in the week. It is rumoured that Italian stainless steel mills will further decrease their scrap prices due to low demand and high costs, especially for long products. This is considered as part of the producers' strategy to reduce their scrap stocks. While scrap prices are expected to be further reduced in September, economic conditions in the region are also thought to contribute to this.
Spain
Rebar prices in Spain decreased by EUR 35 to EUR 565 at the beginning of October. This decrease is attributed to the general weakness in demand and the greater availability of imported rebar in the local market. Competitive prices, especially from China, Indonesia and North Africa, are increasing the pressure on Spanish mills.
Behind this weakness in Spain is the stagnation in the construction sector and general economic uncertainties. The slowdown in projects in the country and local producers having to struggle with increasing costs have led to lower prices in the market.
In Spain, the steel market was characterised by a significant decrease of EUR 30 in HRC prices from EUR 600 to EUR 570. CRC prices, on the other hand, decreased by EUR 40 to EUR 680 this week from around EUR 720 in the previous week. These sharp decreases in steel prices in Spain are seen as a reflection of the weak demand across Europe and the fact that it is one of the countries where competition is felt most intensely. Prices are further pressurised by the intensifying competition between exporters and importers and low energy costs. Similarly, while lower production costs compared to other European countries enable Spanish steel producers to remain competitive in the global market, this advantage is offset by weak domestic demand.
Benelux
Scrap prices for 80:20 in the Benelux region decreased by EUR 7 to EUR 288 in the week. This decrease was attributed to the contraction in demand and slowing economic activity in the region. In general, the scrap market in Benelux is experiencing a contraction in line with other major economies in Europe. Producers in the region are struggling to stabilise prices in the face of increasing costs and decreasing demand.
Netherlands
Contrary to the general trend in Europe, 80:20 scrap prices in the Netherlands started the week with an increase of USD 4, reaching USD 339. This increase is attributed to supply constraints and supply chain disruptions in the region. Some producers in the Netherlands noted that prices have been on an upward trend, especially due to delays in the supply of outsourced scrap. If supply constraints in the country persist in the short term, prices may see further increases.
UK
The LME wire mesh market in the UK continues to follow a volatile trend. Current prices were recorded at 581 USD and these fluctuations are thought to be caused by global economic uncertainties, supply issues and demand fluctuations. The UK steel market is more volatile than global markets, especially due to post-Brexit supply chain problems and uncertainties in the domestic market. LME steel mesh prices are expected to continue this volatile trend in the coming weeks.
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