The downtrend in international scrap prices and subdued export demand were cited as major factors likely to lead to further price drops.
However, most customers in both Northern and Southern Europe need to restock, which was expected to support price rises, sources said.
“In the coming weeks, a lot of them will have to buy,” one trader in Northern Europe said.
One source in Southern Europe expected the market to be steady in May, however. “It will all depend on Algeria,” an Italian producer source said.
The absence of business with Algeria has weighed on Italian exporters, as the country – a key destination for EU long steel exports – has so far neither issued import licences nor announced 2017 quotas for rebar and wire rod
As a result, EU long steel producers mainly focused on sales within the union
, although some Spanish sources said that the reason for this was good domestic demand.
Some European steelmakers declared in mid-April their plans to increase prices for finished long steel products
from May production.
But the market has not seen prices rising yet, amid subdued demand on the export side
as well as scrap price dynamics.
Domestic deal prices for rebar dropped by an average of €7.50 ($8.18) per tonne in Northern Europe and by €15 ($16) per tonne in Southern Europe over the past month. Export offer prices remained broadly steady but trading activity was almost non-existent.
As demand for finished steel remained limited, Metal Bulletin has heard of Europe-origin billet being exported, in particular to North Africa.
Prices for Spain-origin semi-finished products were heard around €400 ($436) per tonne cfr Morocco, sources said.
“Those who can sell rebar outside Algeria, sell it; others adjust by offering other assorted products,” one trader said.
Both the major Spanish steel mills have been exporting billet, according to market participants, while Italian steelmakers have not been heard exporting any billet recently.
Italy’s prices for domestic ferrous scrap dipped by €5 ($5) per tonne this month
In Germany, steel mills settled their monthly contracts for ferrous scrap purchases at largely unchanged prices in April
, while export prices for Northern Europe-origin scrap have been mostly declining in the second half of the month.
Metal Bulletin’s daily index for Northern Europe-origin HMS 1&2 (80:20) steel scrap exported to Turkey closed at $261 per tonne cfr on April 26
, after increasing to $271 per tonne cfr on April 18 from $261.66 on March 31.