Italian re-rollers are planning to continue lifting tube prices in line with the sharp increases already seen for hot rolled coil values.
Several large players have continued to source imported HRC to cover substantial volume requirements, despite the prospect of higher costs linked to CBAM and quotas. One buyer tells Kallanish it is sourcing material from producers who are expecting to face lower CBAM charges, although it remains uncertain how costs will ultimately evolve, and the company is currently reviewing its supply chain. The source adds that CBAM effectively acts as a duty and an additional protection measure, while the harsher constraint on imports remains safeguard and quotas, which can be exhausted within days given the significant needs of some large EU steel processors.
Another market participant says that, should safeguard measures be confirmed under the expected rules, a sharp rise in European HRC prices is likely. “The key issue for us is understanding when this strong increase will occur,” the source comments.
Market conditions for tubes and coil derivatives in Italy and France remain relatively calm following the holiday period, sources say. However, due to recent price increases, apparent demand has re-emerged in Italy.
Tube prices are also expected to continue rising in the coming months, with the scale of increases depending on the severity of safeguard measures, according to re-rollers.
Following the implementation of new price lists by all Italian re-rollers in December, discount levels currently stand at around 42-43 points. Producers are now aiming to reduce levels to 40 points as early as this week, sources say.
One large European steelmaker confirmed to Kallanish last week that his asking price for HRC is €670/tonne ($779.39/t) base delivered. An Italian tube producer notes that, at a discount of 42-43 points, the standard 40x40x3 tube grade is priced at around €770/t, which is insufficient to generate a profit. Re-rollers require a spread of roughly €170/t between HRC and this workhorse grade to avoid operating below cost. This would imply a tube price of at least €840-850/t, alongside a reduction in discount to around 38 points in the coming weeks, to restore margins.
A French source adds that passing higher values downstream remains challenging, while Italian re-rollers have so far maintained a firm stance on pricing.
