Italian and wider European welded tube prices are set to increase in January, pushed up by the further hikes in hot rolled coil values implemented by European producers this week, Kallanish hears from re-rollers.
Tube discounts are falling after Italian re-rollers pushed up prices last month. However, values are lagging behind the HRC deal price hikes seen in the European market.
ArcelorMittal is now reported to be offering HRC in Italy at €800/tonne ($876) base delivered for March shipment, up some €60/t compared with offers registered in December at €740/t base delivered (see separate story).
Re-rollers find themselves in need of updating their price lists, with some communicating to their customers they are decreasing discounts to the level of 32 and 33 points with immediate effect. Next week, the level of discount will be pushed down further, to 30 points, which will not be enough to cover costs if HRC transactions reach €800/t.
A source argues that HRC prices are increasing too fast, meaning there is no other choice for coil derivative product sellers but to implement strong increases. In Italy, discounts have now reached some 34-35 points, and about 36 points in other European countries.
The workhorse tube grade 40x40x3 is pegged at about €850/t ex-works, barely enough to cover processing costs. With the new HRC values, prices should surpass €1,000/t, Kallanish notes.
Tube processing costs continued to increase in 2023, with financial costs, particularly, rising 20-25% over 2022. This weighed heavily on steel processors due to their large stocks of coils and tubes.
Natalia Capra France