Italian hot rolled coil prices are increasing in quotes and contracts by some €70/tonne ($75/t) on average compared to the lowest levels seen last month, Kallanish hears.
All European producers are now quoting longer lead times. In Italy, some mills have few allocations left for the end of March and will soon begin quoting April delivery. Prices have been pushed up to €750/t base ex-works or €760-770/t base delivered, sources say.
Buyers have gone quiet since steelmakers announced increases last week, but both service centres and their clients will have to start ordering to replenish their depleting stocks.
Sellers from Japan, Korea, Taiwan and India also have low availability for Italy. Some are not offering while others proposed limited-time allocations at €695/t cfr that expired quickly. These steelmakers are expected to also push up their prices to well over €700/t cfr in the coming days, but with delivery only in June and clearance not likely until July.
Italian buyers have the option to purchase from Turkey, which is offering at €740/t cfr duty paid for service-centre quality material and arrival by the end of March. Amidst low availability and longer lead times, buyers are left with little choice but to order in Italy or Europe.
While there is some resistance to higher prices, service centres and re-rollers, in need of material for second-quarter delivery, are expected to start purchasing this week. Steelmakers’ price hike attempts are likely to be successful considering the low availability and good demand downstream.
One large service centre says that even if demand from the automotive and appliance sectors remains subdued, all other industry sectors have full order books, some until the end of the year. The general view of 2023 is positive, Kallanish notes.
Italian HRC contracts are now being transacted at €680-720/t base ex-works. This reflects a strong increase from €620-650/t base ex-works at the beginning of December.
Natalia Capra France