Italian rebar producers have stopped sales this week and are expected to increase prices significantly due to high energy costs.

Peaking energy prices are causing some mills in Europe not to resume production after the August maintenance stoppages. Ferriere Nord in Italy, a subsidiary of long steel producer Pittini, has requested access to a temporary layoff scheme for over 750 workers at its plant in Osoppo near Udine. Production at the plant will remain idled this and next week (see Kallanish 30 August newsletter).

Mills in Italy, Germany, France and Spain are facing increased energy costs each day. Some are judging it unprofitable to produce at current gas and electricity prices, and are said to be prolonging August stoppages for another couple of weeks.

Italian rebar makers were asking for €700/tonne ($702) in August before stopping sales. Current contract prices for domestic material are at €650-690/t base ex-works. Including size extras, domestic levels are again above the bar of €900/t, hovering at €910-950/t ex-works, market participants tell Kallanish.

Some construction companies will also prolong summer stoppages as the looming economic recession and continued high prices are causing some firms to delay new projects. Rebar distributors are beginning to enquire about cheaper imported rebar. Some imports of Chinese material were reported in June and July at some €200/t less compared to domestic material.

Meanwhile, European scrap prices remain unclear for September. While some mills will not resume production, most longs producers are reaching September with full scrapyards and are not in immediate need of material, Kallanish notes.