The Italian and broader European coil market is witnessing a downward trend in pricing. European prices are experiencing a decline to align with the lower import levels. The current sales environment for mills in Europe is characterised by a notable lack of momentum, as buyers are predominantly taking a cautious stance.
Certain larger buyers, however, are prepared to engage in and have already implemented import and European material deals, contingent upon securing competitive pricing. European steelmakers are currently experiencing short lead times, with reports suggesting that one company has sold in Italy as well as other EU nations at a price slightly exceeding €530-550/tonne ($613-636/t) delivered. A base price of €570/t delivered has also been heard. However, the outlook for prices in the upcoming weeks suggests a consolidation of drops to align with import levels. Buyers are in a favourable position, given the substantial stock levels and the weakened demand in downstream sectors.
The service centres and re-rollers who spoke to Kallanish suggest that there is currently no urgent demand for purchasing, and the decline in downstream products such as sheets and tubes is exerting pressure on margins.
This week, market participants, including sellers and trading sources, report an uptick in interest regarding potential buying of coils this week. In the upcoming week, it is anticipated that buyers will re-enter the market. The decision to re-enter the European domestic market or pursue imports will depend on the concessions that EU producers are prepared to accept to ease sales.
Italy is currently facing a downward trend in HRC offers originating from Turkey and the Far East. Current offers from Turkey are noted to be within the range of €480/t cfr including duty. The Turkish offers starting at €500/t are inclusive of duties. Several buyers are evaluating the potential acquisition of this material. Considering the first proposal, HRC is available at a price range of €520-530/t delivered to a warehouse.
Indonesia HRC is offered at €470/t cfr. Other Asian producers, such as those in Vietnam and Thailand, are setting their large-tonnage vessel prices in the range of €500-510/t cfr.
A source in the non-Italian steelmaking sector indicates that there are expectations of price increases in September attributed to the Carbon Border Adjustment Mechanism (CBAM). However, the scenario does not yet support the prices of the European market. A foreign trading source operating in Europe says producers outside the EU expect the commission to implement modifications to the safeguard mechanism. It may permit limited tonnages to enter the European market. Implementation of the melt-and-pour clause will exert additional additional pressure on imports.
Natalia Capra France
