Rebar prices in the United Kingdom will increase further this year under pressure from rising raw materials costs, the chairman of the British Independent Reinforcement Fabricators Association (Birfa) said this week.
“Cost pressures on steelmaking raw materials and consumables continue to mount, driven by consumption in other sectors and regions,” Andy Kirkcaldy said on Wednesday January 11.
“Steel mills have already issued letters warning of significant price increases to be implemented through 2018 [and] Birfa believes that it is important for the construction industry to take these warnings on board,” he said.
Metal Bulletin’s weekly price assessment for domestic rebar in Northern Europe was €540-570 ($646-682) per tonne delivered on Wednesday January 10, up from €530-565 per tonne.
With Chinese blast furnace-made rebar subject to an anti-dumping duty in the UK, the long product being imported into the country is much more likely to be melted from ferrous scrap, leaving the UK rebar market more exposed to scrap prices, according to Kirkcaldy.
Metal Bulletin’s bellwether daily index for Northern European HMS 1&2 (80:20) closed at $366.99 per tonne cfr on Thursday, up by $0.79 per tonne day-on-day and by $86.41 per tonne year-on-year.
Kirkcaldy also identified high graphite electrodes costs as a risk to British rebar fabricators, with limited needle coke supplies and reduced manufacturing capacity for graphite electrodes already driving up prices for the heating elements used in electric-arc furnaces.
Graphite electrode prices rose from around $2,000 per tonne cfr Turkey in 2016 to as much as $22,000-40,000 per tonne cfr last year.
Prices have since dropped back from these levels, but costs are still expected to trouble European steelmakers in 2018.
Another factor likely to lead to high prices for rebar in the UK is the fact that demand appears to be outstripping supply in the market, according to Kirkcaldy.
“Reinforcing steel stocks at the ports are not high, and forward orders with overseas mills are largely pre-sold,” he said. “It is thus likely that further price increases will [have an effect on] the market very quickly.”
