September was a difficult month for Italian distributors and service centres with low activity and margins coming under pressure. Welded tubes saw the most activity, while long product sales generally struggled.
One large distributor tells Kallanish that business held up despite the subdued market, thanks to its ability to meet customer needs and offer a level of service that mills cannot match.
“We are well stocked and can provide different measures and different products in one shipment,” he says.
Overall, the market has not properly restarted after the August break.
“Customers negotiate hard and manage to have good prices in this market,” another distributor says. An agent confirms that demand for tubes is better than for other long and flat products. However, he admits that even on tubes, sellers have to compromise on prices to secure sales.
For long products, multiple sources say they are starting to feel the end of post-Covid EU-funded infrastructure projects.
“On sections we’ve seen a clear slowdown in volumes since July,” a purchasing group says. An agent confirms this, although some work on beams still comes in every day.
Merchant bar mills keep pushing for increases, with offers at €390/tonne ($443/t) base. Prices remain at €350-360/t base delivered, excluding size extras.
Sections asking prices are between €850-860/t for the first category, but Spanish material is priced at least at €30-40/t less, making increased asking prices difficult to achieve.
Tube buyers are resisting the new price lists implemented by large tubemakers, causing confusion. Several buyers say they struggle in understanding the new price lists and have been buying from smaller re-rollers, with prices mostly stable compared to the beginning of September. Some say the level of discount remains stable compared to August at 40-43 points.
One source notes that in the current market the issue is not the price but volumes. He confirms that there is slightly better appetite for welded tubes but laments a general low apparent demand which mirrors the weak real demand.
The market is not seen improving in the near-term with the first quarter also likely to be weak amid elections in various countries. If volumes do not recover in the new year, mills will be forced to reduce capacity.
Additionally, all sources talk about lengthening payments.
