ROHSTOFF INTERNATIONAL

10:00 | 17.08.2017
CRU: Why Steel Scrap and Imports Drive German Rebar Prices

LONDON, August 17, 2017 /PRNewswire/ — Many market participants hold the view that rebar prices are mainly determined by demand – i.e. construction activity – and thus are very seasonal. However, German rebar prices tumbled in Q2 2017 despite booming construction activity in the country. A closer analysis shows that supply-side factors, principally import competition, and input costs such as scrap prices often outweigh the effect of demand. (Logo: http://mma.prnewswire.com/media/536199/CRU_Logo.jpg ) Price falls amidst booming demand The German construction sector is experiencing an extraordinary year. The order books of service centres and mills are completely full and some market participants are even reporting delivery problems. The production index of the German construction industry measured by the Federal Statistical Office of Germany hit its highest level in two decades. The unadjusted index reached 152.8 in May (the highest level since September 1997) whereas the seasonally and calendar-adjusted index reached 140.2 in March (the highest level since September 1996). According to wide-spread belief, rebar prices should have increased significantly from the calm winter months towards summer when construction demand is booming. Indeed, in the period 2010-2016, the average rebar price in the second quarter was EUR21 /t higher than the average price in the first quarter (see figure 1). This fact seems to strongly support the notion that rebar prices are driven by seasonal demand. However, 2017 appears to be fundamentally different: prices fell from EUR500 /t in February to EUR450 /t in June. This insight aims to establish a better understanding of the main drivers of rebar prices. It will demonstrate that rebar price movements are not strongly influenced by seasonal demand. Instead, they are mainly driven by changes in global scrap prices and import competition. Read the full story: http://bit.ly/steel-scrap-and-imports Read more about CRU: http://bit.ly/About_CRU About CRU CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events. Since our foundation in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China. CRU employs over 250 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004. When facing critical business decisions, you can rely on this first-hand knowledge to give you a complete view on a commodity market. And you can engage with our experts directly, for the full picture and a personalised response. CRU – big enough to deliver a high quality service, small enough to care about all of our customers.

Photo:
http://mma.prnewswire.com/media/536199/CRU_Logo.jpg

Photo: http://mma.prnewswire.com/media/536199/CRU_Logo.jpgCRU

CONTACT: Lemar Montellano, +44-207-903-2070; Colin Mills, +44-207-903-2235


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