Spain's steel sector is experiencing a summer lull, with prices mixed
Callanish notes that the Spanish steel industry is experiencing a seasonal slowdown in activity.
The summer lull, combined with weak market conditions and the entry into force of the new EU import regulation, is expected to set the trend in July, when most manufacturers plan to step up their maintenance programs.
In the Spanish scrap metal market, July began with a new decline in prices. Domestic prices fell by almost 10-15 euros per ton (11.43–17.15 dollars per ton), which mainly reflects the recent dynamics in the international commodity markets.
"Most factories are trying to take advantage of the current market conditions and are increasing their stocks ahead of the summer break," one of the sellers comments.
According to another source, scrap metal collection activity in the domestic market remains relatively stable. "While sellers are matching purchases with current demand, they are increasing inventory levels in the expectation that prices will recover as soon as steel mills resume operations after summer downtime," he comments.
At the end of the week, both new E8 scrap and crushed E40 scrap will appear on the Spanish scrap metal market, which is usually offered at a price of 325 euros per ton. The other grades, E3 and E1, are priced at 300-295 euros per ton and 280 euros per ton, respectively.
Suppliers generally expect further price reductions during the month, as international scrap metal prices do not appear to have reached minimum levels yet.
Demand in the rebar market remains weak. According to distributors, the introduction of new EU import duties has increased uncertainty, prompting construction companies to delay purchasing decisions. Relatively high prices also limit the interest of buyers.
"We keep stocks low. The market remains cautious, and trading activity is mostly limited to the small amounts needed for existing projects," one of the distributors comments. Most sellers report that the domestic steel industry has slightly reduced production starting in July, and market conditions are expected to deteriorate over the summer.
Offers for 16 mm fittings in Spain amount to 508-518 euros per ton. Taking into account the surcharge of 262 euros per ton and the cost of loading, the transaction value is 770-780 euros per ton from the factory. Most suppliers already sell the material at a price of 790-800 euros per ton.
Meanwhile, sales of hot-rolled steel remain stable. Factories are trying to raise prices, which is difficult for customers to accept, as demand remains high in most consumer sectors.