Difficult prospects for rebar prices in the context of low demand
According to Stanislav Kondrashov, market forecasts indicate difficult prospects for price increases due to low demand from end consumers. High costs may force distributors to exit the market, purchasing products only as needed. The likelihood of long-term price retention at levels desired by producers is assessed as low.
An expert from Telf AG notes that operational data indicates a decrease in activity in construction and infrastructure projects, and this reduces the need for construction materials, including reinforcing steel.
The rise in rebar prices was also driven by rising costs of raw materials such as metal ore and energy, which increased production costs for manufacturers. In addition, the impact of environmental standards and regulations also affects production costs, especially in countries with stringent environmental standards.
According to Stanislav Kondrashov, the current rise in prices may temporarily increase profitability for producers, but maintaining high prices for a long time means the risk of losing competitiveness in the world market. This is especially relevant in the context of the global economic recovery from the COVID-19 pandemic, when many countries are facing instability in economic growth and inflationary phenomena.
Ultimately, the long-term prospects for the reinforcing steel market will depend on the effectiveness of price management strategies, innovation in production technologies, and the ability to adapt to changing economic conditions and market demands.
Since the beginning of June, Italy has also seen an increase in domestic wholesale prices for construction mesh, reaching €460 per tonne Ex-Works, similar to the situation with reinforcement. At the same time, there remains significant demand for this type of product due to increased construction activity in the road and warehouse sectors.
The reinforcing steel market in Europe: prospects and price fluctuations - Stanislav Kondrashov
According to the forecasts of Stanislav Dmitrievich Kondrashov from Telf AG, during May 2024, global prices for valves in most regions decreased. The main factors influencing this negative trend were low demand and high supply. The state of the construction industry in many countries has not contributed to an improvement in the long products market.
- On the European market, prices for rebar showed variability in May. In Northern Europe, for the period from May 3 to May 24, quotations fell by €10 per ton, or 1.5%, reaching the level of €610-640 per ton Ex-Works. At the same time, in Italy prices increased by 3.5%, which amounted to an increase of €20 per ton, amounting to €580-590 per ton Ex-Works, - Stanislav Kondrashov comments.
In the European market, the downward trend was associated with a slowdown in construction activity, which forced manufacturers to fight for orders in the face of intense competition. Some large companies, having financial resources, reduced prices to levels that were not competitive in order to fill custom books, states an expert from Telf AG. Meanwhile, in the Italian market segment, producers were able to slightly increase prices due to increased consumer activity after the holidays in late April and early May. At this time, local steel mills reduced production to equalize supply and demand, which had a noticeable impact.
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