Italian service centres’ customers are registering a significant slowdown in demand for their products, which is impacting the entire value chain amid continued stagnation.
Several countries, including Germany, and industrial downstream sectors such as white goods, agriculture and construction are registering low demand, even below pre-pandemic levels.
Coil buyers remain on the fence, as does the entire value chain, Kallanish learns from market participants. EU safeguard quotas and long lead times make imports from Asian sources unattractive. This is however doing nothing to balance supply with demand. “The only thing that may shake the market is if European producers cut output significantly. At one point, we will have import offers for January boarding and if production cuts happen in Europe, a shortage may stimulate buyers to purchase a little more than one truckload,” a source comments.
ArcelorMittal is rumoured to have decided to idle one blast furnace out of two in Fos-sur-Mer. Contacted by Kallanish, the company declined to comment. If implemented, the shutdown would add to the maintenance stoppages at ArcelorMittal Hamburg and Bremen, and help the market to address the current issue of overcapacity.
Other European producers are also mulling production stoppages, but Italian steelmakers are instead said to be slowing production, with no outright stoppages scheduled for the moment.
In Italy, domestic hot rolled coil values are stable on-week, hovering at €610-620/tonne ($647-657) base delivered for November lead times, sources suggest. All European producers are quoting very short lead times.
The situation is similar for cold rolled coil or hot-dipped galvanised coil. CRC is said to be at €720-730/t, with import offers from Asia at €670/t cfr Italy and domestic demand very weak. Domestic HDG values are also flat so far at €750/t base ex-works on average.
Natalia Capra France