Italian service centres are enjoying unprecedented demand from the appliances sector, as well as the automotive industry which is ordering at pre-Covid-19 levels. The market, however, remains complicated due to the short supply of coils and the rapid price uptrend, Kallanish learns from market sources.
Demand from the appliances sector is more than double on-year, but spot contract buyers are trying to resist the steep price hikes. While service centres are improving their margins, they are having a hard time following the increases, as well as finding supply. When they can, they renegotiate contracts already signed months ago to slightly adapt their values.
The service centres who are well stocked are working at good levels and benefitting from the price rally as they are successfully passing on the increases to their customers. Some, however, are beginning to doubt that demand from the automotive sector will remain at current levels in the new year once stocks at European carmakers are replenished.
Cold rolled and hot-dip galvanized coil contracts this week are between €740-750/tonne base ex-works. Hot rolled coil values are at €650/t ($791) base ex-works in transactions. Local coil producers, however, are not quoting or quoting only for limited quantities, sources say. In January producers are expected to push up prices for HRC to €700/t base ex-works and €800/t each for CRC and HDG, sources say.
