Italian long steel makers see growth in demand from construction

Italian long steel producers have registered an increase in demand after an easing of the coronavirus-related lockdown, with market sources saying apparent demand is close to the same level as in June and July 2019.

“Demand is better than we expected, but we need to say that March and April are months lost forever, so yes, demand is OK, but overall, the first seven months of the year on average were lower [than last year]; and it is important to say is that margins are lower compared to July 2019”, an executive director from one of the main Italian long mils said.

Market sources pointed out that long producers more exposed to the automotive sector are suffering more than those, whose core business is long steel for the construction industry.

Sources say mills with automotive end users as their core customer base are reported to have a slightly longer summer maintenance on average than in August last year, with at least three weeks of stoppages. By comparison, mills that produce steel for the construction sector are likely to have stoppages of around two weeks, while some larger mills are only expected to stop for one week.

Feralpi, one of the main steel Italian steel long producers, is planning a temporary stoppage of just a week in August at its mill in Brescia, Northern Italy, having closed large volume orders for next month, Chairman Giuseppe Pasini confirmed to S&P Global Platts. Brescia has been one of the Italian regions hardest hit by the coronavirus outbreak, along with Bergamo and Milan.

A number of Italian long steel producers have secured large-volume orders from customers outside the EU, including to Canada, and some to North Africa, making their stoppages shorter.

Italian mills are expected to push for higher finished steel prices, after the summer maintenance stoppages to recover their margins. International scrap prices have also moved up, with early expectations of an increase for August monthly scrap settlements in Southern Europe, according to mill and recycler sources.

Platts assessed Southern Europe domestic shredded scrap at Eur240-Eur245/mt delivered for July, down from Eur245-Eur250/mt delivered in June. Platts assessed steel rebar FOB Southern Europe at Eur397.50/mt on July 24, unchanged on the week.

— Annalisa Villa, Viral Shah