Italian merchant bar values are increasing again this week, by €30/tonne on-week, after all domestic long product mills issued in mid-May hikes of €100/t ($122), sources tell Kallanish.
Asking prices are now at €420-430/t base ex-works. Starting next week, another increase will bring values to €470/t base ex-works for June, in line with June’s hiking domestic scrap values.
Including size extras, contracts for merchant bar are now, for the first time in a decade, at well over the level of €800/t ex-works. Buyers are now paying €400-430/t base ex-works for the cheapest merchant bar grade. With €420 size extras, contracts are hovering at €820-850/t ex-works, sources suggest.
Italian and Spanish mills are said to have full order books also thanks to northern and Eastern European demand, as those buyers are currently refusing to work with Liberty Steel Ostrava.
Customers in Italy are accepting the general steep increases on all long products, but insurance and bank guarantees for their purchases are becoming a matter of concern. The Italian distribution sector is said to be encountering difficulties in absorbing the steep increases and passing them on to end-users. One distributor tells Kallanish he is concentrating on other products as, despite the price rally, Italian demand for merchant bar remains subdued.
Thanks to the current steep increases in longs prices, distributors agree this will be a record year in terms of revenue.
Natalia Capra France