Stagnating demand and depressed prices are persisting in Italy for coil derivatives, such as sheet and welded tube. European steelmakers are nevertheless increasing coil prices significantly due to limited supply, following several production stoppages and import quota exhaustion, Kallanish notes.
Service centres are seeing continued weak demand. They are pushing up sheet prices to €750/tonne ($814) ex-works for hot rolled sheet and €780/t for pickled material, but this is barely enough to cover their costs. They are now receiving hot rolled coil bought weeks ago at €650/t base ex-works, while their sheet selling prices hovered at €680-690/t ex-works or lower in October and at the beginning of November.
While some prefer to lose orders rather than sell at below cost, many have been chasing volumes and discounting material. Their customers are now ready to purchase for first-quarter and first-half delivery in 2024, and have been able to secure fixed prices for the entire H1 2024 at October’s low levels.
Companies downstream have not been united in pushing forward increases, giving end-users the upper hand. Selling sheet at €700/t delivered will eat significantly into companies’ earnings and Q1 is not seen improving. Some service centres report they are increasing selling prices to €720/t for hot rolled sheet and believe that, gradually, values will hike.
Meanwhile, European steelmakers are giving buyers lower allocations for Q1 due to shortages. After slow sales last week, several sources now report domestic HRC values beginning to increase in contracts to €630-640/t delivered. HRC prices are seen increasing further to €670/t delivered, sources suggest.
Natalia Capra France
