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November, 24th 2020

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JUL 29
17:11

Slowing construction demand pressures German rebar price

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Rebar purchasing activity from the German construction industry is slowing down, and bending shops are facing increasing price pressure, domestic market participants say.

Construction has enjoyed a prolonged period of strength in Germany, and was largely unaffected by the coronavirus in the first half of the year. But industry observers now suggest a slowdown will come with a delay. One large buyer says new projects are not coming in as they used to, which could foreshadow a drop in prices later this year.

Mills were able to lift base prices last month by some €10/tonne to around €180/t ($212). But players polled by Kallanish this week rule out the possibility of a further increase. Most, however, do not foresee a dip either, now that the through has been left behind. They argue that mills’ margins are too narrow to allow for a rebar price reduction unless scrap prices fall sharply.

Nevertheless, restrained purchasing may also see cut-and-bend buyers speculating on cheaper deals, “…because their own selling prices are quite miserable,” a source from a mill admits. In fact, a buyer from a large southern German distribution group tells of a reduction of selling prices to customers. The group was exempt from mills’ price hike that occurred some weeks ago, and stayed at the former level of €170/t.

This is also the price reported from Switzerland, which followed the hike implemented in Germany, but at a level altogether some €10 lower. In Austria, nominal domestic prices are at around €170/t, too, but with competition from Italian imports, rebar can be had for €150 (see Kallanish 28 July).

Article comments

jack liu
Aug. 4, 2020, 10:33 p.m.

Hope this is not the reason for the shrinkage of the construction industry. This will affect our ride on power trowel sales.