Day: 21 April 2021

After a decrease in February, Italian flat steel production increased in March by 10.6% on-year to 943,000 tonnes, according to data issued by local steelmakers association Federacciai. Flats output also hiked in the first quarter by 3.1% on-year to 2.7 million tonnes.

Longs production jumped in March by as much as 96.6% to 1.2mt, taking Q1 output up 29.2% to 3.3mt, Federacciai says.

The March longs figure compares to the first lockdown in March 2020 when Italian mills suspended production due to the spread of Covid-19. Nevertheless, according to market participants, this output surge is also the result of strong domestic and export demand in Q1 for certain Italian long products, such as wire rod and merchant bar.

Crude steel output in Italy skyrocketed in March by 68.8% y-o-y to 2.3mt (see Kallanish 20 April).

Natalia Capra France

Italian merchant bar is seen increasing in new May contracts as producers are expected to raise prices again on the back of strong demand from other European markets.

Due to Liberty Steel’s financial troubles, European customers are not buying from its Ostrava mill, thereby taking large tonnages out of the European market. Like last month, Eastern European buyers are focusing on Italian and Spanish producers. Spanish producer Celsa has halted sales and is expected to also increase its prices this week.

In Italy, this would be the second price hike for merchant bar this month. Asking prices were already pushed up to €290/tonne ($349) base ex-works ten days ago. Italian producers are seen pushing their values to well over the level of €300/t base ex-works, Kallanish learns from market participants.

This week, transactions in Italy gained €10/t on average compared to last week. Contracts are at €250-260/t base ex-works. Including size extras, a workable price is €670-680/t base ex-works, sources suggest.

While southern European producers are enjoying high demand on the export market, domestic demand remains subdued as Italian distributors refuse to stock up at current prices. Purchases are only back-to-back and merchant bar stocks in Italy remain low. Margins for distributors are not always profitable.

March was a record month for merchant bar sales, agents say, adding that activity, particularly in the north, remains high this month.

Natalia Capra France

One of Turkey’s largest steel producers, Colakoglu, which was planning to pause output in May for maintenance work, has postponed its plans to meet its customers’ demand in a tight market, Ugur Dalbeler, CEO of the company, told Platts April 20.

“We have decided to postpone the maintenance to not leave our customers in a difficult situation while a material shortage is dominating the market,” Dalbeler said.

Turkish mills’ hot-rolled coil offer prices for August rollings have been rising continuously amid availability issues, higher HRC pricing globally and strong export demand. Mills’ HRC offers reached as high as $1,070-$1,100/mt ex-works in recent days, while their export offers reached $1,050/mt FOB and above.

Colakoglu has decided to raise its HRC output capacity by 50% with a new annealing furnace investment.

The company’s HRC production capacity will reach 4.5-5.0 million mt with this investment as of the second quarter of 2022.

The company will also soon start to produce special steel steel grades at world’s largest VOD (vacuum oxygen decarburization) plant. Colakoglu will be able to produce special steels like IF grades, ULC grades and stainless steels at this plant.

Colakoglu is one of Turkey’s largest steel producers, with bar output capacity of 1 million mt/year and current HRC production capacity of 3 million mt/year.

— Cenk Can

Shipments by Brazilian independent flat steel distributors and service centers in March increased 22.7% year on year to 325,400 mt, recent data from Inda, the national flat products distributors association, showed April 20. Shipments were up 4.2% on month.

Shipments of hot-rolled coils totaled 189,300 mt in March, up 40.9% on year, while zinc-coated flat steel sales volume totaled 63,400 mt, a fall of 11%.

Domestic purchases from mills in March were up 24.8% year on year to 340,100 mt, according to Inda.

Month on month, domestic purchases grew 5.6%.

Flat product inventories in the Brazilian distribution network reached 711,200 mt at the end of March, down 16% on year, while the inventory-turnover average closed March at 2.2 months of supply. Historical average levels are around three months.

However, Brazilian distributors may downsize inventories level target to about 2.5 months, said the group president Carlos Loureiro. “After the price hikes, distributors may decrease their inventories levels to not compromise their cash flow,” said.

According to Loureiro, flat steel prices accumulated increase of 35% this year.

Flat steel imports in March by distributors totaled 140,443 mt, up 139.8% year on year.

— Jose Guerra