The massive slowdown in Germany’s construction sector has seen rebar prices fall further, with more mills heard cutting production.

In June, domestic transactions can be had for a base price of under €400/tonne ($428), a value that was reached and undercut towards the end of May. The latest outlook (see separate story) for residential construction, the main customer sector for rebar, likely means an additional hurdle for demand and prices. With the summer break coming, there is little prospect for any upswing soon.

Meanwhile, a manager at a distribution company tells Kallanish of official production cuts at one of Germany’s larger producers. “They have held discussions with their works council, and have filed for approval for short working hours with [governmental labour authority] BFA,” he says. He adds that mills are at their limits. In addition to low demand, a gap is opening between weakening scrap prices and the faster fall of rebar prices, he cautions.

The construction slowdown is ubiquitous in Western Europe. In Austria, one observer notes that activity in recent years was overheated from public subsidies. Meanwhile, “firms work with less staff and at a slower pace. Projects that used to be through in a matter of three months for us now take six,” he says.

Rebar prices in Austria have fallen more dramatically in recent weeks than in Germany. In order to compete with Italian offers, domestic base prices last week reached €345/t, which with the size extra of €265 translates to a delivered price of €600/t. Some observers note, though, that this low mark has so far appeared only regionally.