Prices for Europe-origin rebar and wire rod have increased by €5-35 ($5-38) per tonne during March, but started to retreat in the last week of the month.
The March rises were mostly supported by the scrap price increases in the first half of the month, while demand remained sluggish.
Market participants mostly expected prices to go down in April, citing tough competition and cheaper scrap costs, among other reasons.
“I think that [the market] will go further down [amid lower] scrap prices and pressure from the Turkish mills,” a producer source in Southern Europe said.
Metal Bulletin’s daily index for Northern Europe-origin scrap closed at $257.71 per tonne cfr Turkey on March 29, compared with $293.69 per tonne on March 15.
“I think [long steel] prices in Europe will go down a bit following international patterns, especially for scrap prices,” one Italy-based trader said.
In the European domestic market, scrap prices are currently going down as well, after the €30-45 ($33-49) per tonne increase in both Southern Europe and Northern Europe in March, Metal Bulletin understands.
Demand is unlikely to support long steel prices either, as import quotas and licences in Algeria, a key destination for EU-origin long steel products, have not been issued for 2017 yet and the issue date remains unclear.
As rebar and wire rod trade has been practically blocked, Algerian customers have increased their billet imports this year, sources said.
“There is a little bit of pressure and prices may decrease further in April, [as] nothing is happening in Algeria,” an Italian rebar and wire rod producer source said.
“Turnaround might come when Algerian licences are available, because all customers will want to buy at once,” one trader said.
With both export and domestic demand being subdued, a possible shutdown of Russian rebar imports was not expected to bring much relief to the EU mills.
The wire rod market was said to enjoy better demand than the rebar market, and thus prices were expected to be “falling slower”, according to one trader.
However, a recent petition filed by US mills against imports of wire rod from ten countries including Spain and Italy may affect Spanish exports, Metal Bulletin understands.
Meanwhile, Italian mills will not be affected. “I never sold 1 kilogram of wire rod to the US,” a producer source in Italy said.
The European long steel market is expected to weaken next month amid slack demand and downward pressure from scrap prices.