European rebar market caves

European rebar prices have caved on the back of a sustained weak market and the fast-approaching annual vacation period in continental Europe, sources told Platts the week ended July 25.

Having increased gradually to keep up with Turkish export offers earlier this year, the chill in the market has finally taken effect as the impact of quiet order books was felt.

In line with reported transactions the Platts European rebar assessment was revised down to Eur740/mt ex-works northwest Europe, a drop of Eur75/mt ($117.50).

"In Europe the producers are going on holiday early this year as they have no orders on their books," an industry source told Platts. "Nobody can afford to pay the prices being offered by the mills," he continued.

The market has faltered in recent months as projects have been mothballed in the wake of the credit crunch, said another source.

"In Europe they have been trying to keep the prices stable but even traders are unable to mark out pricing positions. I think from now on producers will try and hold prices where they are knowing that eventually the projects will need to be built," he added.

Platts was told that in the UK market traders and consumers were largely following the lead of European steelmaker Celsa, which was said to be eager to keep a grip on what scant market activity there was available.

"Last week Celsa dropped their prices by GBP10/mt ($19.90). This was designed to let people know that they are on top of the market, that they can keep out cheap exports by moving their own prices," said one source.

However, he warned that any other price reductions by the dominant producers in the region could set about a wave of further uncertainty.

Created: August 1, 2008

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