Italian service centres struggle amid competition, low consumption

Italian sheet prices continue to lag behind coil price increases. Service centres are reporting mostly stable values for sheet compared to the beginning of the month, but particularly slow sales.

Many sellers are seeing a significant reduction in consumption compared to last year and forecast a slow April because of holidays in Italy. Coil service centres are currently not managing to properly pass coil price increases on downstream.

This is happening despite shortages of some grades. With Acciaierie d’Italia producing less and there being no imports from Asia, 2,000mm wide material is hard to find, together with other grades, such as 355 grade 15mm, and high-thickness pickled sheet. Basic-grade hot rolled coil remains flat at some €920/tonne ($991) delivered. Besides the slow consumption, the issue in the market is the aggressive attitude of some service centres selling at lower prices to gain volumes, sources suggest.

Buyers restocked in January. However, since demand is now much slower, stocks are lasting longer and purchases are only happening back-to-back. Competition between service centres on prices has intensified. Mills’ coil prices are forecast to continue to increase through the second quarter but also Q3. Coil services centres will have no choice but to pay the increases without being able to pass them on downstream.

Meanwhile, coil prices are continuing to rise, with large HRC producers already mulling more increases. The situation of shortages and no imports is persisting in Europe. HRC values may be pushed to €900/t base ex-works and €1,000/t for cold rolled and hot-dip galvanized coil in the next few days, Kallanish hears.

Natalia Capra France