German rebar mills are the undisputed world champions in keeping prices up, currently at some 20% above those in the US, more than 30% above those in nearby Italy, and nearly double those in Turkey.

As these gaps are getting increasingly implausible, local buyers are suspending their purchasing activity, waiting for the facade to crumble. A correction has of course occurred from the all-time peak of €1,200/tonne ($1,253) base registered in April, but in recent weeks prices have not followed the further falls seen in Italy, for example.

Since May, €1,100/t has been the nominal value given by mills, and not seriously disputed by observers. There will be deals below that, but new orders are too sparse to pin down a different figure.

“It’s much cheaper in all neighbouring countries. The difference is extreme, and meanwhile I’d say it’s very extreme,” an experienced German manager tells Kallanish. “I’ve lost my sense for what’s real,” he adds, not without irony.

The apparent insular position of Germany can only partly be explained by its healthy construction economy. The other part is the peculiar ownership structure of rebar mills in Western Europe. Most of them are owned by Italian parents – in Germany, the Benelux, and even more so in France. Hence, they can control prices along borderlines. “I get my material from Charleroi, but I get charged the price named by their German units,” one Ruhr-based buyer explains.

With two Italian groups represented at mills in Germany, and one in Switzerland, only one Italian rebar producer is left as a possible exporter from Italy to the north, the buyer explains. “But they prefer their regular customers in the Alpine region to have their capacities utilised,” he adds.