The Italian long products market remains subdued and largely unchanged, with merchant bar and beam prices stable on-week, despite a general market downturn. Scrap values continue to fall, making it harder for longs producers to push for price increases.
Prices are expected to remain weak, stabilising at the lowest levels reached in June. A major distributor has expressed concern over needing to write-down the value of inventory bought at higher prices after values dropped, but he anticipates some price stability in the near term, Kallanish notes.
Market volumes are comparable to last year, although slightly lower in some cases. However, margins have eroded significantly, especially in downstream segments. Producers are reportedly earning very limited profits at current price levels.
Some mills are considering price hikes, but widespread concern over losing orders is holding them back. Supply may tighten in July as sections and merchant bar mills are planning stoppages.
A buyer in France says Italian longs prices are lower than in nearby markets, but apart from a few Italian rebar producers, others are nevertheless refusing to sell in France and Germany.
Italian merchant bar demand remains weak, with forecasts remaining pessimistic. Domestic levels are at €650-670/tonne ($752-775) delivered inclusive of size extras. The first category of beams is also holding steady at €780-810/t delivered, with Spanish offers at €40/t less.
Italian rebar prices continue to decline on a weekly basis, with base ex-works values now at €230-240/t. Including size extras of €260-270/t, transaction levels range between €490 and €510/t ex-works.
Natalia Capra France
