Spanish Rebar Market Foresees Hikes Despite Cheaper Scrap

Some long steel traders in Spain anticipate an increase in rebar prices in the coming days due to costlier energy, despite mills lowering scrap purchasing prices. They tell Kallanish they are concerned about the negative effect this is having on their activity and on the construction sector.
The Spanish scrap market sees prices lowering in the coming days, supported by the international downtrend (see separate story).
“In a normal situation, if scrap prices fall, the logical thing would be to have at least a stable level if not quite a similar reduction for rebar. Instead, large mills are announcing a €30/tonne hike for steel used in construction,” a source remarks. “This cannot be explained just by rising production costs. It is also because steelmakers are apparently unwilling to step back from their profit margins. The situation would further impact the construction sector, which has many projects stalled due to market movements and costlier materials.”
According to another trader, the rebar price increase will be passed on to distribution centres in the first days of December and will further bottleneck their activity. “The situation can be resolved only with the urgent intervention of the Spanish government through Next Generation EU funds. Their arrival, for now, has not been announced, nor is it known when it will take effect,” he observes.
Meanwhile, rebar is currently sold domestically in Spain at €450-460/t ($508-519) base. Including €262/t size extras, transaction values are at €712-722/t ex-works. Some offers have also been heard at €730/t delivered for 16mm rebar.