The post-summer renewal of Italian steel market activity is proceeding at a glacial pace. Some executives are returning from their August vacation this week; however, the lack of activity has resulted in a significant number of them taking additional days off and awaiting market guidance.
Distribution sources and agents who spoke to Kallanish anticipate an “inevitable” pricing decrease in September for the majority of long and flat products. The summer pause has had an limited impact on the domestic and import markets this month. A trader says the European steel market is currently subdued, resulting in virtually no activity in other countries such as France and Spain.
Despite expectations of a Turkish scrap rebound, the shadow of recent declines is hovering over the European market, where both scrap sellers and buyers expect imminent price reductions.
The Italian distribution sector is not purchasing, as confirmed by one large and one mid-sized local distributor. “We are buying only the essential to address any gaps in our inventory. We have sufficient inventory to satisfy the market’s diminished demand. Automotive components, metalworking, and agriculture are all stagnant,” the large distributor comments. The market appears to be restarting very feebly, he adds. Distributors and a mill source confirm that orders for September are limited.
Prices have remained steady compared to the end of July, as there has been no activity this month. Mills have suggested there will be additional reductions for scrap, and some are offering the mixed new arisings grade at a rate as low as €330/tonne ($368/t) delivered. If this level is achieved, it would represent an additional €20/t decrease from the beginning of August.
In September, buyers anticipate a decline in prices of all long products by approximately €20-30/t. The market is not expected to become dynamic, but a suitable recovery is anticipated to occur next week. The small-volume sales and significant degree of uncertainty currently reported are expected to result in a relatively prolonged wait-and-see attitude.
Natalia Capra France