MEPS International Limited predicts an upturn in German wire rod prices in the first and second quarters of 2012. Selling figures have increased by approximately 3% since December 2011 and it is anticipated that suppliers will lift them further in the first trimester.

Medium sections transaction values are expected to increase by around EUR 60 per tonne over the next six months. A rise of EUR 20 has been secured in Germany in the last month. Consumption is better than anticipated because construction site work has been able to continue longer into the winter than usual. Moreover, government spending on infrastructure has been stepped up.

Rebar selling figures have firmed by over 7% MoM in January 2012. Unseasonably high temperatures have enabled building activity to continue without a break. Consequently, fabricators need to replenish inventories that they had allowed to decrease. Producers are now pushing for further advances in market selling values.

MEPS has noted some upward price pressure for merchant bar. Although the full EUR 30 per tonne rise, planned by the producers, has not been fully implemented, values have risen by EUR 10 since MEPS December figures were published. The overall supply demand situation is improving due to extensive production cuts over the holiday period.

Reduced output levels, combined with rising input costs should assist German producers to successfully implement at least part of their proposed increases in the first half of the year. Re stocking by customers throughout the supply chain is also likely to help boost mill demand and lift transaction values in the short term.

(Sourced from MEPS - European Steel Review)