With rebar quotations experiencing another big hike this month from €200/tonne ($230) base price delivered to a maximum of €250/t, resulting in an ex-works price of close to €500/t, long-term planning has become tricky, Kallanish hears from market participants.

The recent leaps in scrap prices are seen possibly continuing, resulting in German domestic mills refraining from giving rebar quotes much beyond January/February. Mills are concerned their scrap costs could rise more massively in the meantime, the chief buyer of a stockholders group notes.

Imports are not an alternative, as their prices have gone up to around €460/t cif Antwerp, and the price difference might not justify the risk, unless the differential is definitely around €60, the buyer estimates. If ordering rebar from Turkey now, production would be January, shipment February, and arrival in March.

“It may be an option if you supply a site where construction starts only in April, but else there are too many disadvantages involved,” the buyer says. Upfront payment, tied-up capital, surcharges for low-water transports on rivers in winter are the negative factors, “…and of course not everyone can easily store 10,000 tonnes in his yard,” he adds.

An interesting aspect pointed out by several sources is that mills assume an increase of prices, while buyers assume a stagnation, or relaxation in due time. One stockholder’s manager notes that such “…wishful thinking” has already caused a shortage of many inventories, which will need to be filled at high prices in January.