German construction rebound will be difficult: Feralpi Stahl
A sustained revival of construction activity in Germany will require more than only a rebound in orders. It will also need a reactivation of business processes that have slowed down. Uwe Reinecke, general manager of German rebar maker Feralpi Stahl, does not expect significant progress this year.
Increasingly more projects for residential building in Germany are being put on hold or are abandoned altogether. This is the case with family homes as well as social housing. Building activity has long been lagging behind growing demand, and a housing shortage has become one of the most discussed issues in German politics.
“Approvals for buildings have declined, and new momentum will not come quickly,” Reinecke tells Kallanish. He points out that this is not only a matter of market and demand, but also depends on the speed of the permitting process. If municipal town planning offices cut back on service hours, and their staff are moved to other departments, they are unlikely to return to full capacity all that quickly, he adds.
The same applies to staff numbers at medium-sized construction firms and their materials suppliers. “Once personnel has been reduced, it will not instantaneously re-grow when demand rebounds,” he notes.
Public construction and investment into renewable energy is faring better, but not perfectly. As an example, he cites the concrete towers and foundations of wind power plants, which use some 150 tonnes of rebar. “But the permissions for new wind parks here in Saxony take seven years to come about,” he says, blaming inflated bureaucracy in many sectors.
The extension of power grids that goes with the expansion of renewables has created further bureaucracy plus a continuous surge in grid fees. Electricity prices have somewhat relaxed from last year’s high, but remain a factor of influence, as do scrap prices, Reinecke observes. Apart from these flexible factors, he does not see actual market activity spurring major movement in volumes and prices of rebar.
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Anonymous
Very good overview of the weekly steel market.
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