Italian re-rollers are cutting back their discounts and planning to halt sales in response to recent price hike announcements from European hot rolled coil producers, according to industry sources.
In Italy, tube discounts are starting to decline. According to one re-roller, he is at 45 points and unwilling to go below this level. Nonetheless, the level of 47 points is still available in the market. A number of tube suppliers, steelmakers and service centres who spoke to Kallanish agree that HRC, tubes, and sheets will see significant price increases in the near future.
Europe is anticipated to strengthen its defences by granting some of the most recent safeguard review requests from Eurofer following the recent US tariff announcement.
“Now, a new phase is beginning,” a re-roller source remarks, “we must embrace it and learn to control the new macrotrend that will involve higher steel prices and a new management of the supply chain that will be strongly impacted by the additional protectionism.”
Ports will be filled with material starting on 1 April. In order to avoid paying duties, some re-rollers and service centres confirm they will continue to leave material in consignment at the port. Because there will be fewer coils available in Europe, prices will rise and businesses should be prepared to handle their supply chains in a different way in order to adjust to increased pricing and decreased volumes, the source comments.
Prices for European HRC are predicted to rise to €650/tonne ($676.3/t) base delivered in the upcoming weeks.
In light of the present high cost of coils and related processing expenses tube discounts are set to drop to 40 points in the coming weeks. According to another tube seller, “40 points will not even suffice to return to profitability. With the prices we have today, nobody can afford to buy coils at €650/t.” He adds that the commodity grade tube of 40x40x3mm should reach 37–38 points, exceeding €800/t when HRC prices hit €650/t.
Despite the anticipated price rises for all flat products, projections indicate that demand and consumption will likely remain constrained, resulting in subdued volumes for the year.
Natalia Capra France
