Italian distributors forecast prices to decline in October

The Italian distribution sector expects prices in October to fall, but in a gradual and controlled way. Very slow sales amid a collapse in apparent and real demand are plaguing the entire value chain, Kallanish hears.

Some sources believe end users of all flat and long products are withholding purchases because downstream industries can no longer absorb high domestic prices. Many buyers are turning to cheaper imported material, leaving local producers with the crumbs.

Some end-use sectors that buy sheet and welded tube are suffering lacklustre demand and mostly selling from stock, buying as little as possible from both re-rollers and service centres. This is causing a big decline for sheet prices and expectations of further falls.

Intensified competition among sellers has caused hot rolled sheet to go below the level of €800/tonne ($782) ex-works, with expectations for €750/t in October. Domestic sheet is also competing with low-priced imports. Other end-use sectors, however, are reported to have a good level of orders but are limiting their purchases because of high prices.

September was a relatively good month for welded tube sales. Discounts in Italy were between 22-23 points, up from 20 points two weeks ago. Some players decreased their prices and managed to sell volumes, while some end-users are said to have good order books.

Significant overcapacity is plaguing rebar and merchant bar sales, with service centres and distributors reporting a “demand crisis” and collapse in consumption.

Merchant bar is flat at €670-690/t ex-works, as is rebar at around €660-680/t base ex-works. Buyers believe these products will both fall in October and mills will continue to implement stoppages to balance demand and supply. Including size extras, merchant bar is at €1,090-1,110/t ex-works while rebar remains at €920-940/t ex-works, sources suggest.

Natalia Capra France