The shortage of rebar and other construction material in the German market has led to official warnings from companies to their customers.

“We need to inform you that we are facing a shortage of materials never seen before, with consequences for us and you as our customers,” a large stockholding group writes in a circular. Inquiries from customers often go unanswered by mills, and offers for new volumes sometimes carry the disclaimer that mills cannot guarantee deliveries at all, the stockholder adds.

Consequently, it informs construction companies that it will make offers only on the condition that its own supply is warranted, and for the price valid at that time.

Various sources tell Kallanish that lead times from mills are at two months or more, compared with a maximum of one week in normal times. Downstream, lead times from benders to construction firms are now at four weeks, according to a manager of another stockholder. “But the supply upstream, from mill to bender, takes twice that long. Hence, the looming supply gap is certain,” he says.

Base prices for straight rebar from German mills are now at €580/tonne ($703), which plus the size extra of €265 translates to a delivered price of €845/t. But for wire mesh and rebar-in-coil, the bottleneck is considerably tighter. “People do not ask for the price anymore – they are happy if they can get something at all; inventories are empty,” another buyer says.

For his own yard, he has made sure that stocks are sufficient, he says. Orders he placed now would be for August delivery, with wire mesh now fetching a final price of €1,020-1,030/t. Rebar-in-coil fetches about €40-50 more than straight rebar.