Amidst Production cutbacks, Northwestern European Steel Rebar Prices remain Stagnant

Germany: In the Northwest Europe market, Steel Rebar's prices declined during the last week of July. Since mid-July, base prices decreased by more than one-third from the extensively high USD 1,220/tonne that prevailed in April. As per market players, the sluggish demand and a persistent wait-and-see attitude among buyers resulted in little-to-no market activity in the Northern European domestic Steel Rebar.

In the week ended July 13, ArcelorMittal targeted significant price increases across all long steel products to counter the soaring costs of energy. These price increases, however, have not been implemented.

Furthermore, trading activity remained low, with demand and mills closing for maintenance during the summer. Buyers are still holding out hope that prices will fall further. These expectations are based on international scrap prices falling over the last week after surging in early July. This attitude overlooks rising energy costs or potential energy shortages in the fourth quarter.

According to market participants, energy rationing, as proposed by the European Commission on July 20, could put upward pressure on energy prices if implemented. The EU Commission would be able to impose 15% binding gas consumption restrictions on European nations over the next two years under emergency legislation designed to protect countries from the possibility of Russia weaponizing gas supplies in the coming months. If the proposal is accepted and the measure passed, each country must decide how to implement the cuts.

As per ChemAnalyst, "With energy prices already surging, news of rationing and the potential implementation of rationing could drive up energy prices even further." It would also almost certainly result in production cuts across European steel mills. Production cuts are likely to reverse the downward trend in all long steel products. While acknowledging the long-term impact of cost increases, Steel Rebar prices will remain unchanged until the end of August, when the holiday season is over—decreasing international scrap costs since mid-April has also been a significant factor in the falling rebar market.