The Northern European Steel Wire Rod Prices Are Declining

Germany: Northern European Steel Wire Rod prices have fallen again this week, following a significant drop the previous week, due to lower downstream demand and further scrap price reductions in the European market. Most market participants anticipated that the Steel Wire Rod price would rise next month. According to traders, Steel Wire Rod prices are down by USD 50-80/tonne due to market uncertainty amid soaring energy prices. However, buyer sentiment has remained subdued, and quotation orders have been limited—domestic transaction prices for drawing-quality Steel Wire Rods have remained lower.

Traders note that northern European steel wire rod prices have fallen, owing primarily to rising energy costs, higher inflation rates, and concerns about a European recession. As per domestic participants, the steel manufacturers in the European market are relaxed for now because they have already sold the inventories required to fill the planned capacity in July and will hamper the production activity in August due to the summer holidays. However, they may raise prices later as anticipated restocking combined with a halt in production activity implemented by European steelmakers, and some recovery in steel consumption is likely to support costs. According to the Northern European distributor, demand is improving, but it is coming from such a low base that it will be challenging to achieve average rates this year; because distributors have sufficient inventories, they have been hesitant to book more material in a declining market.

According to manufacturers, trading activity is currently weak, any improvement is slow, and expected restocking has yet to begin. They believed, however, that due to reduced steel output, an extended summer maintenance period for steel manufacturers, and equipment outages, buyers would have to restock for September no later than the end of July, thereby supporting domestic price recovery. These specific measures, combined with some recovery in import prices and a demand from European consumers to replenish for September, have impacted prices, halting the downward trend that began in early July. As per ChemAnalyst, "The Steel Wire Rod prices have reached the bottom, and restocking will start by the end of this month."