Argentina's rebar prices increased in late January for February bookings, following the higher costs of production, market sources said in the first days of February.
S&P Global Platts' monthly assessment for Argentinian domestic steel rebar increased 3%-4% for the February bookings at $760-$770/mt delivered for 8mm, 10mm and 12mm rebar, and $810/mt delivered for 6mm rebar.
Previous prices were $735-$750/mt delivered for 8mm, 10mm and 12mm rebar, and $780/mt delivered for 6mm rebar.
"Acindar increased its rebar by 3%-4%, and other particular materials up to 8%," one distributor said.
Energy-cost increases for February and March were announced in the last week of January to be between 40%, for small consumers, and 150%, for large consumers, such as industrial consumers.
"Energy costs are increasing significantly, so mills are adjusting their prices due to higher operational costs," a second distributor said.
Another source said mills were trying to push prices even higher. The mills argue costs are increasing. These costs include energy, coking coal and other international raw materials that spiked in the last quarter of 2016. "Distributors cannot deny the new lists as their production costs also jumped in the past quarters," he said.
Hikes were indeed expected for the first quarter of 2017 due to the increase in raw materials -- mostly driven by coking coal.
However, demand continues to be lackluster in the construction field, where few if any infrastructure investments have been done in Argentina. The construction sector is now mostly driven by small buildings, housing and investments from the private sector. Construction was also slowed in January due to heavy rains in the country.
The construction sector closed 2016 with poor numbers. According to the country's National Institute of Statistics, Indec, construction activity in Argentina fell 12.7% year on year in the January-December period, while in the last month it plunged 7.8%.
Apparent consumption data for construction in December showed a 18.3% year-on-year decline in rebar, and a 19.4% decrease in the January-December period.
Rebar is produced domestically by four companies in Argentina: ArcelorMittal's Acindar unit, Aceros Zapla, Gerdau and Acerbrag, part of Brazil's Votorantim Group.
