European Steel Wire Rod Prices Surge Amid Restocking Efforts, Construction Sector Remains Cautious

In the first week of October, the price of Steel Wire Rod shows a rising trend across the European market as the input cost increases along with restocking observed in Europe. The demand still experiences a plunging rate as the construction and manufacturing activity lowers in the domestic European market. Furthermore, the holding of interest rates by the European Central Bank provoked the buyers and domestic consumer industries to remain in a wait-and-watch situation until the market situation uplifts. The restocking of Steel Wire Rods has been observed as the major cause of the price hike in the domestic mills.

European Steel Wire Rod prices witnessed a significant upward trend in the first week of October as buying activity rose slowly. However, this surge in demand appears to be driven primarily by restocking efforts rather than genuine demand from the construction sector. Despite this, the residential sub-sector has shown some signs of improvement. Germany, a key player in the European steel market, has seen its Steel Wire Rod mills aggressively raising prices in response to last week's buying spree. This surge in buying suggests a temporary increase in production, which mills had kept at low levels for the past month. Due to the mills ' actions, many customers have been prompted to restock their shelves.

The price hike can be attributed to unsustainable prices that leave minimal room for profit. European steelmakers are grappling with high energy and raw material costs, particularly in producing Steel Wire Rods, impacting Germany significantly. Mills have no choice but to increase prices as the consecutive rise in raw material and scrap costs pushes prices northward. Failure to support the ongoing price increase could force steel plants to reduce production rates or operate at a significant loss. Despite the recent surge in demand, overall consumption remains weak, and market activity remains subdued. This, combined with a decision by a Polish local producer to halt operations for maintenance in October, is expected to stabilize prices for Steel Wire Rods.

Construction companies, purchasing groups, and distributors' customers are adopting a cautious "wait-and-see" approach, closely monitoring each other's actions and international markets for guidance. In conclusion, while the European Steel Wire Rod market has experienced a rise in buying activity, driven by restocking efforts and some improvement in the residential sub-sector, uncertainties surrounding the sustainability of the price hike persist. The industry closely monitors the situation, with many stakeholders cautiously navigating the market for Steel Wire Rods in the coming weeks.

According to ChemAnalyst, the price of Steel Wire Rods is anticipated to rise as the mills push their production cost. Furthermore, the industry anticipates new restocking in October, followed by a slowdown in November amidst the rising cost of feedstock such as Iron ore and steel scrap, which would uplift the cost of Steel Wire Rods in the European spot market.