Italian coil becomes two-tier market, imports garner attention

Italian coil service centres continue to report dramatically reduced demand and remain concerned about their ability to pass mill price hikes on downstream.

In March and April, “demand has practically reduced to nothing”, one service centre says, and adds that customers in the distribution sector are refusing any price hike.

Italian hot rolled coil producers are asking for some €900/tonne ($985) base delivered, quoting June lead times, while contracts are being done at €860-880/t base delivered. In recent weeks, however, domestic demand has stalled and sellers are reporting only small-volume sales.

At the same time, strong supply chain disruptions are expected in Europe in April and May due to the fires hitting ArcelorMittal in Spain and France, and the Tata Steel force majeure at Ijmuiden in late February. ArcelorMittal has confirmed this week that delays are expected to deliveries (see Kallanish passim).

Service centres are turning to the import market. Import offers from India, Japan and Korea are heard at $750-800/t cfr Italy, with delivery in July. Re-rollers are achieving good deals from Asia, with contracts done at below $740/t cfr but for low-quality material. The allocations from these countries however are limited, between 3,000-10,000 tonnes, and may not satisfy service centres’ needs.

The market is said to be “divided”, with producers having full order books and a supply shortage looming, on one hand, and coil processors grappling with weak demand and low downstream prices, on the other.

The automotive sector is reported to have slightly increased orders but the components shortage is still disrupting production in Europe.

The Stellantis plant in Sochaux, France, is meanwhile being idled until 14 April, Kallanish learns from the company.

While semiconductors supply continues to be a challenge, the plant will stop producing due to a shortage of gear boxes. “We believe we will continue to see sequential improvements, but we don’t expect the situation to be back to normal before the end of this year … We drive our activity on a daily basis, plant by plant, by adapting our industrial activity to the automotive market trends, and by taking into account the different situations we are facing,” the firm comments.

Natalia Capra France