Prices for Italian rebar contracts are rising, although demand remains low and buyers are reluctant to restock at current levels.
Manufacturers are counting on a base price of 460 euros per ton (541.07 US dollars per ton) from the manufacturer, which has not yet been included in the agreed contract prices. Over the past week, transaction prices have increased by about 30 euros per ton and amounted to 440 euros per ton in the basic configuration.
Buyers and agents are not confident in the demand in the secondary market and in their ability to ensure price increases. Despite this, the price increase continues. Two buyers told Kallanish that they were only buying what they were selling, rather than building up inventory, while others had reduced volumes to what they could afford at current prices.
One major customer reported that he was purchasing only a third of the usual volume.
A source at the factory says that the market is usually quiet in the first ten days of the month, but buyers return to purchases in the second half when their stocks are depleted, providing demand sufficient to maintain current high prices.
All European rebar manufacturers have raised prices, and none of them are willing to make concessions, leaving customers with no choice but to pay for the price increase.
Producer costs have skyrocketed amid the US-Iranian conflict. As high prices are causing a shortage of large volumes, several factories are planning to suspend production in the coming weeks to balance supplies and avoid accumulating large inventories. This will further increase their fixed costs.
Taking into account the size allowances of 260-270 euros per ton, the actual transaction prices for Italian rebar are currently estimated at 700-710 euros per ton from the factory, compared with about 540 euros per ton in early March. The price of the grid at the factory is 510-520 euros per ton, and additional dimensions are about 300 euros per ton.
Author: Natalia Kapra
Kallanish.com
