Spanish rebar prices started to recover last week, Kallanish notes. Since the beginning of December, 16mm material increased by almost €20/tonne ($21.1/t). Prices are yet however to return to November levels.
“Demand is constrained, with most suppliers and distribution centres suffering from reduced construction activity in the country,” a market participant observes. “The housing sector is going through a crisis, which should also have an impact next year.”
Some long steel traders in Spain anticipate a new increase in rebar prices in the coming days, despite mills maintaining unchanged scrap purchasing prices.
“Following November’s higher demand, new contracts at higher prices are jeopardising the continuity of large [construction] works and housebuilding. Current levels practically checkmate the sector until January,” one source comments. “Energy has become costlier once again and is set to go still higher ahead of Christmas. The steel market is trying to recover, but expectations are not high enough in the short term for domestic demand.”
Rebar is currently sold domestically in Spain at €430/t ($453.59) base. Including €262/t size extras and €28/t loading expenses, transaction values are at €720/t ex-works.
On the other hand, Spanish scrap prices have remained unchanged for almost a month. The general expectation is that levels will go up progressively from the coming week. “We are collecting less material due to general lower production activity, but also as a result of ArcelorMittal's reduced presence in the Spanish market,” one trader explains. The steelmaker’s absence from scrap purchasing could be mainly explained by its plan to improve scrap self-sufficiency through the acquisition of collecting companies across Europe, he adds.
According to another trader, activity slowed down last week due to the national holiday in Spain, but the market is expected to react soon after seeing how prices have risen in the international market. “New higher Turkish purchasing prices should support strong domestic levels through most of December,” a source estimates.
New arisings grade E8 scrap is now offered in Spain at €400/t delivered. Demolition-quality grade E3 stands at €345/t, while E40 is priced at €360/t, both delivered. E1 quality is at €295-300/t on the same basis.
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Very good overview of the weekly steel market.