The Italian coil market is stagnant, with buyers adopting a wait-and-see approach. They tell Kallanish that they are unwilling to engage in purchases within the European market, citing sufficient inventory levels that will sustain their operations for at least the next three weeks.
The gap between the values of imported and domestic hot rolled coil has, in some cases, surpassed €100/tonne ($113/t). Whilst rerollers have some more work, service centres report lacklustre demand. Overall, demand continues to be subdued, resulting in pricing and margins facing significant pressure in downstream markets. Sheet prices have once again fallen below the €700/t delivered threshold. Hot rolled sheets are priced in a range of €680-690/t delivered. Pickled products remain at €700/t, raising substantial concerns regarding profit margins.
The coil market in Italy, as well as across Europe, is experiencing an influx of lower-priced import offers. Turkey is positioning itself as a notable alternative import source for Italy. Offers from Turkey are reported within the range of €520-525/t cfr with additional duties applicable, reaching up to €540/t cfr inclusive of duties. Buyers contend that the first offer would equate to about €580/t delivered, a level that is viewed as competitive, with material scheduled for delivery in July. Offers from India and Northern Africa are re-emerging at approximately €540/t cfr, whereas Indonesian HRCs are being offered at a rate below €500/t cfr.
Producers in the EU are experiencing a decline in order volume, with lead times for June and July in Italy reported at €620/t base delivered. The level of €600/t delivered has, however, been realised in contracts.
A service centre reports stable demand in terms of volume; however, it is experiencing narrow margins and is not contemplating purchases in Europe due to high coil pricing. Given the current rates for sheet and other derivatives, service centres are compelled to source from the import market to mitigate their procurement costs.
Another service centre holds a similar perspective, anticipating that buying activity will not resume until July. Stock levels are moderately high, and given the current low demand, they are experiencing slow depletion.
One trader indicates that current demand for both domestic and imported coils is weak, as steel processors are operating with reduced sales volumes and are focused on depleting their existing inventories.
A third service centre forecasts that demand is unlikely to resume in the upcoming months. European producers “have to decrease their price or chose not to sell. At a time like this nobody dares to buy,” that service centre operator says.
A producer source confirms the disappointing sales figures and noted that last week the market experienced an almost complete standstill.
The Carbon Border Adjustment Mechanism (CBAM) dilemma implies that import purchases from distant sources will undoubtedly slow down in September or October. A source indicates that CBAM is expected to exert additional pressure on service centres, potentially resulting in costs of up to €50/t starting 1 January 2026.
A steel processor with operations in Europe and other third countries emphasises the importance of entering September with full inventories, taking advantage of low import offers before CBAM. In the fourth quarter, only the nearby origins, specifically Northern Africa and Turkey, will be accessible, as the material is projected to arrive at ports before January.
Natalia Capra France
