Italian coil prices are ticking up week on-week. Downstream, however, sheet and tube demand is still weak, with prices lagging behind.
Coil order intake also remains slow, with buyers yet to return to the market. Several buyers tell Kallanish they have sourced hot rolled, cold rolled and hot dip galvanized coil from imports. Import buying eased from mid-September when Asian mills raised their offers.
With stocks still sufficient, buyers are only taking small volumes from European mills to cover inventory gaps.
Kallanish assesses HRC Italy at €730/tonne ($822/t) ex-works. In September, service centres and re-rollers sourced material from various Asian producers and Turkey at €560-580/t cfr. In the second half of the month, Asian mills lifted prices, and some import deals are now heard at €675-700/t cfr.
Although imports have become more expensive, buyers continue to purchase to diversify supply and avoid relying solely on European mills.
A smaller service centre says it only buys imports on a ddp basis when available, and otherwise covers its limited needs from European producers. Very few traders now offer ddp, however, with most quoting cfr.
HDG import contracts are heard at €750-760/t cfr, excluding CBAM costs. Adding this would bring these prices close to current European levels, where HDG deals are at €840-860/t base delivered. A large service centre says it has to buy imported HDG because European supply is limited and it needs to restock.
The new price level for black hot-rolled coil in Italy and across Europe is €730-740/tonne, base delivered with offers at €750-790/t base. Demand is weak, but producers are uncompromising on prices for small and large customers alike. “Protected as they are, producers know that demand in Europe will recover and prices will keep rising,” a source comments.
Service centres are still making money at current sheet prices as they bought cheap Asian coil in the first half of the year. However, “downstream activity is very slow and sheets increases are lagging behind,” a service centre says.
“With increasing import prices we play it by ear. We bought a lot in August and September and we have stock to cover us at least until almost the end of the first quarter,” another service centre comments.
Demand for black hot-rolled sheet remains tepid. Payment delays are heard throughout the value chain. Prices are stable at €810-820/t delivered. “At €820/t you often lose orders,” an agent warns.
