Italian distribution faces slower coil derivatives market

The Italian distribution sector is expressing concern regarding the current double-tier market. Coil prices have increased strongly since the resumption of activity in January but coil derivatives such as sheet and tube are lagging behind.

Producers are about to announce increases for sheet and push up tube prices, but some buyers are withholding their purchases because of uncertainty. According to a large service centre and a purchasing group, there is no euphoria over coil derivative sales, particularly considering appliances sector activity is subdued.

Sheet prices start at €850/tonne ($910) ex-works for the basic hot rolled grade and go up to €880-890/t for the pickled grade. On one hand, these values are seen increasing this month as producers intend to align sheet prices to HRC increases. On the other, however, the distribution sector fears the speculative attitude of certain European HRC producers who are increasing prices too quickly and may restart more blast furnaces in Europe.

Despite improved coil and derivative sales volumes since the turn of the year, distributors and service centres consider the market to still be fragile. Further HRC capacity restarts would contribute to a price reduction throughout the value chain.

Tube sales are particularly sluggish, sources tell Kallanish. Buyers are refusing any increase and insisting on keeping the level of discount at 32 points. Some grades, such as structural and seamless tubes, remain in short supply.

Natalia Capra France