Both the long and flat steel product sectors are stagnating in Italy, with tube prices edging lower while sheet prices are holding stable, Kallanish notes.
The first quarter was distorted by some restocking among distributors due to rising prices linked to the Middle East conflict. From April, however, the distribution sector has slowed its purchases significantly, continuing to sell only small volumes. Buying throughout the value chain has been limited to immediate needs and often the bare minimum.
Some products are seeing stronger activity, sources report, particularly sections and welded tube. Tube demand is holding up but prices continue to lag behind hot rolled coil increases. Tube discounts remain stable compared to May at 41-43 points. Hot rolled sheet prices are also holding at €760-780/tonne ($885.6-908.9/t) ex-works, though lower prices have been heard in the market.
“We are working little and badly. There is no visibility; one day we sell, the next we sell nothing. The first four months of the year were fine but from May the market has really slowed downstream. Now it seems completely stuck,” a distributor tells Kallanish.
Two more distributors confirm prices for both long and flat products are mostly stable. “Mills would like to increase prices, but the market does not absorb [this], and often distributors lower their selling prices as they need to generate cash flow,” one adds.
Margins have generally improved on the back of the price increases, but volumes for both products remain absent, and no significant change is expected in the near term. Uncertainty persists downstream, with customers avoiding volume purchases and combining different grades in a single truckload. One source says stocks remain relatively high as current demand does not allow for swift depletion, adding that he will not restock at current prices but will continue to buy moderately.
