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European long steel prices increase in early August

European long steel prices have moved up by Eur10-25/mt month on month in August so far, driven by good demand ahead of the traditional summer break, sources told S&P Global Platts Thursday.

The Italian rebar market in particular rallied in the week ahead of the traditional August holiday period, as reported by Platts. According to the Platts TSI index, the rebar market has increased by Eur25/mt month on month, reaching Eur554/mt ex-works Ruhr in the week ended August 3.

After a period of destocking, buyers returned to the market, triggering price increases. Despite this, scrap was relatively stable and some large buyers bought cheaper material mainly from Turkey.

“We saw prices increase, really triggered by good demand across all of Europe. Southern European prices moved up a lot, with the price difference with northern Europe reaching only Eur20/mt. That is the right gap, not the Eur40-50 we saw previously,” a source commented.

Prices are expected to increase further in September, with supportive fundamentals seen continuing. Quotas established by the EU safeguards are also expected to be filled soon, giving even more scope for domestic increases, sources said.

“We saw cheap imports coming mainly from Turkey, due to the lira depreciation. Now rebar is around $530-535/mt FOB, so the CIF EU price is around Eur480/mt. But stockholders prefer not to buy, as the quota system is too tricky and it is not clear when it will be filled,” a European stockholder said.

“Those that bought from import were the big construction companies and this did not really disturb the prices. On top of that I am sure by October most of the quotas will be filled,” he added.

The EU has imposed safeguard measures in response to the US’s Section 232 tariffs. The quota for rebar is 710,000 mt, after which imports will be subject to a 25% tariff.

Rebar in northern Europe increased to around Eur560-570/mt effective delivered for 12 mm diameter, or Eur300/mt base ex-works, in the Ruhr area.

In France the tradeable price for domestic rebar has reached Eur290-300/mt, or Eur555-565/mt effective delivered, up by Eur20/mt compared to the beginning of July. In Italy prices are around Eur540-550/mt effective delivered for the same grade.

An Italian mill executive said that his company received a bid from Canada at around Eur480/mt FOB but did not accept it, as the price was too low and his mill was already fully booked until mid-September. He also noted that the mill will close for 2-3 weeks this month and then aim to push for Eur20-30/mt increases in September.

With the summer holidays in full swing, most of Europe is expected to see more limited market activity until the end of the month.

In the north European scrap market, negotiations for monthly settlements are currently underway, with broad consensus that prices could drop by Eur5mt following the downtrend in the export market, although some suggested that the market is more stable given a number of mill stoppages this month.

The current average base prices in northern Europe for merchant bar is Eur160-170/mt delivered, up by around Eur10/mt since the beginning of July.

Sections category 1 is reported in north Europe at Eur610-615/mt effective delivered. Several sources said that mills aim to reach Eur650/mt effective delivered during September to October.
Source: Platts

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