Italian re-rollers are raising prices by around €40/tonne ($45.8/t), with some halting sales altogether while others have already notified clients of the increases which are effective immediately.
The move is the first market reaction to the reduced quota allocations, which also cover welded tubes, Kallanish notes.
Italian coil producers have also suspended sales in the meantime, as steelmakers across Europe consider similar price increases.
The coil market remains slow, with buyers yet to return to purchasing in Europe. They are expected to do so in September when contracts and volumes will inevitably rise given the lack of alternative sourcing origins. New coil price quotes are expected to emerge this week.
June was a particularly difficult month for coil and derivative sales. Tube prices lost around €40/t due to challenging downstream demand and a total absence of apparent consumption, with tube discounts reaching 43-44 points. All re-rollers are now announcing a three point reduction in discounts, equivalent to a €40/t price increase.
One re-roller says the new trade measures “remain something that will strongly change the market.”
Beyond being particularly restrictive on HRC, the regulation severely limits imports of tubes. Ukraine, for example, which had hoped to be exempted, has been allocated a quota of only 6,000 tonnes/quarter, compared to its previous allocation of nearly 20,000t.
The sharp reduction in tube quotas will inevitably push buyers back towards European sourcing, the source adds.
Another re-roller says that with the current discount levels of 44 points a workhorse squared 40x40x3 welded tube grade is around €800/t, which with S235 black HRC at €700/t base delivered, is not sustainable, and that is before considering the HRC price increases expected as early as this week.
