All producers of long products, including de bars, wire rod and H beams mills are crossing a very delicate moment as their order books are basically empty and without immediate perspectives of new bookings. Buyers are holding back and thus prices are falling down at a quite fast pace.
One week ago, Italian de bars producers were offering a price of EUR 480 per tonne to EIUR 485 per tonne FOB Stowed for commercial grade and standard size de bars, while beginning of this week they were available to consider orders at EUR 460 per tonne. However not even this level was good enough to collect significant orders.
At the same time, Spanish Mills were quoting slightly lower than Italians, respectively EUR 470 per tonne last week and EUR 450 per tonne FOB ST this week.
However the lowest negotiable price, seems to be the one offered from Greece where customers could eventually book as low as of EUR 440 per tonne FOB ST.
Many Italian producers and re rollers are now considering to stop production and some of them have already done it. The consideration behind such a move is that while the closing down has well determined and known costs, continuing the race at always lower possible selling prices will probably give much worst results.
Although decreased the price of scrap is still keeping levels that are not in line with the finished product price decrease which is another item pushing producers towards the stop decision. Among others, it seems that also Riva has decided to suspend the production of all long products Italian units.
All H-beams producers are still convinced that demand should revive by beginning of June due to a rather low and generally un assorted stock level and thus resisting on quotation still very close to those of April.
Therefore it seems that the first two weeks of June will be determinant about the trend of the next future.