The Italian coil market is currently experiencing subdued sales, with buyers largely adopting a wait-and-see approach, making only minimal purchases to address minor stock gaps. Two large service centres indicate elevated inventory levels as a result of persistently weak downstream demand, Kallanish notes.
Hot rolled coil prices have largely remained stable this week, following a downward trend observed in Europe the previous week. Import offers are showing signs of weakness, prompting both re-rollers and service centres to adopt a cautious approach as they assess market conditions, waiting for the bottom.
Producer sources suggest limited sales; however, this situation is believed to be temporary. There is an expectation for prices to rebound post-summer, driven by increases in both imported and domestic values due to the implementation of the Carbon Border Adjustment Mechanism (CBAM) from January.
The CBAM effect presents a strategic opportunity for European producers to increase their pricing. This situation, however, may lead to a stagnation in sales, as end-users along with distribution and service centres, are unable to transfer any cost increases downstream.
A prominent service centre suggests contracts originating from Asia need to be finalised by the end of July or early August to ensure timely delivery of material before year-end. He predicts the market will resume buying activity in the final week of June. Another buyer plans to make purchases from Asia in July. Both sources believe that neighbouring countries, such as Turkey and North Africa, will increase their prices in September, as they will be the sole import alternatives for Europe.
Italy is currently observing a trend of declining HRC offers from Turkey, North Africa, and the Far East. Present offers from Turkey are observed falling within the range of €510-515/tonne ($588-594) cfr Italy, inclusive of duties; however, sellers appear open to negotiations.
Indonesia is currently priced at €470/t cfr, whereas other Asian producers, including those in Vietnam and Thailand, are pricing their large-tonnage vessels at between €500/t and €515/t cfr. Sources suggest the base delivery price of Italian HRC is at €570-600/t.
Natalia Capra France
