Italian long product prices are holding stable amid very weak activity, with extremely limited restocking ahead of the August shutdowns and high enough stock levels to cover current demand, Kallanish notes.
Some longs prices have started to decline while others are holding as sales remain limited to very small volumes for which customers do not negotiate prices, not because demand is strong,
Mills remain under pressure from high production costs and have implemented stoppages in June and July, which have also contributed to the fall in Italian scrap prices alongside lower international levels. Producers have been cutting output to rebalance supply and demand following months of weak sales. Some are currently idled and plan to resume production in August to take advantage of the lower energy costs typical of that month.
Agents and distributors report some pickup in demand for sheets tubes following the new EU quotas, with activity ticking up slightly since last week. Long product sales, particularly merchant bar, remain particularly weak.
Downstream sources do not expect any demand recovery for long products before August and say the seasonal slowdown is already well underway. Two downstream sources describe the second quarter as one of the worst in a very long time.
That said, two large distributors say they have managed to navigate the difficult conditions by offering value-added services such as combining multiple dimensions and grades in a single truckload and supplying the small volumes that customers currently require.
Merchant bar prices are holding firm week-on-week at €340-350/tonne ($388.5-400/t) delivered or €760-770/t including size extras. This is, however, a decline of some €20/t compared to June. Spanish material is available at around €330/t.
First-category sections are also stable hovering at €800-810/t delivered, sources suggest.
