The hot rolled coil market in Italy is currently facing notable stagnation, characterised by low order volumes and subdued consumption from end-users and coil service centres, industry sources tell Kallanish.
As of 1 October, the majority of HRC import buyers successfully cleared through customs the stocks they had in consignment at ports, coinciding with the renewal of EU import quotas.
It is anticipated that Italian buyers will incur an average duty of approximately 10%, or potentially slightly less, contingent upon the material’s origin. The duty rates for HRC stand at 4.2% from Egypt, 7.5% from Taiwan, 12.5% from Japan and 10.5% from Vietnam.
Contracts that were implemented in March and April at HRC pricing more than €100/tonne ($110.3) higher than current levels will be subject to duty payments. Service centres and re-roller sources indicate they will face significant financial challenges due to the duty, particularly in light of current low consumption levels and soft pricing.
A service centre doubts the recent increases implemented by ArcelorMittal will be successfully passed on downstream. “Certain customers are facing challenges in maintaining production levels throughout the week. Some have resorted to reducing their output. Additionally, the automotive industry, along with other sectors, is currently unable to absorb the existing steel production levels,” the source comments. A re-roller anticipates values may begin to rise gradually and expects customer activity to increase in October, following the sluggish purchasing observed in September.
Another service centre believes existing coil and derivative capacity is excessive. This, coupled with service centres’ high stocks, may hinder any prices hike.
Service centre quality HRC values in Italy are at approximately €530/t base ex-works but the level of €520/t has been heard in Germany. Cold rolled and hot-dipped galvanised coil are at €650-670/t base ex-works, with the low point of the range being paid for CRC.
ArcelorMittal told customers last week it is raising coil offers in Europe, with immediate effect. The steelmaker is now reported to be offering HRC at €590/t base ex-works, up some €40/t compared with offers registered last month. Other northern European producers are following suit (see Kallanish passim).
Natalia Capra France
