Italian coil derivative market stagnates

The Italian coil derivative market is suffering from weak consumption and relatively high upstream prices, in line with the weak sales performance seen in the fourth quarter last year, Kallanish hears.

Service centre clients continue to report weak demand for their products, particularly in the white goods, automotive and earth-moving machinery sectors. In the white goods industry, some clients are said to be postponing the delivery of already purchased material.

Despite the reduced consumption, sheet values have increased by around €150/tonne ($161) compared to the lowest levels seen at the end of 2023, sources say. However, there is no clear indicative price as sales are occurring only for extremely low tonnages and infrequently throughout January and February so far. Hot rolled sheet is at between €820-830/t ex-works, with some €20-30/t more charged for pickled material.

As sales are scant and for small volumes, customers have not accepted to buy volumes at the recently increased prices. Today’s transactions are insufficient for service centres to cover processing costs or the purchasing price of hot rolled coil in recent weeks.

European HRC producers have been mulling another slight increase for April delivery but, given the slow consumption, the further hike has not yet been announced. The outlook for coil derivatives consumption remains negative with squeezed margins. Domestic HRC is now at an average of €770/t base delivered, sources suggest. This however is for very small volumes.

Natalia Capra France