Italian hot rolled coil overcapacity and low demand is causing prices to continue to drop. Values have fallen by some €40/tonne ($50.6) compared to end-June, in line with the international downturn in flat steel products in Europe.
Cold and hot-dipped galvanised coil activity is also poor, amid weak consumer confidence and low price visibility. Back-to-back purchases are continuing for very limited quantities, market participants tell Kallanish.
July is expected to be a slow month as all Italian producers are reducing their output. Coil producers will start performing maintenance activity starting in the last week of July and will then not resume production until the third week of August.
Acciaierie d’Italia, the joint venture between ArcelorMittal and state-owned Invitalia, will be shutting down blast furnace no.2 this week and restarting it at the end of August. This follows the shutdown of its galvanising lines, sources say. The company however refused to comment.
Demand from end-users has reached a standoff and is not seen recovering before September. Sources indicate domestic HRC contracts at €750-780/t base ex-works, with lead times of end-July. One large steelmaker however is refusing to go below the level of €780/t base ex-works. HDG values now start at €880/t base ex-works or €900/t delivered, while CRC starts at €820/t base ex-works, sources suggest.
Natalia Capra France