Italian stainless flats demand stalls

Sales activity for Italian stainless steel coils, sheet and tube is slowing substantially after resuming in September and sustaining in the first days of October, sources in the sector tell Kallanish.

Despite weak demand for flat products from service centres, end-users and re-rollers, stainless tube prices are being pushed up by some €200/tonne ($197) on average this month on higher processing costs.

In October, hot and cold rolled coil mills, re-rollers and service centres implemented production stoppages to balance demand and supply. This month, however, Acciai Speciali Terni (AST) is restarting all equipment and will produce at normal levels, sources close to the company confirm.

Coil buyers say that since around 10 October, demand for flats has faded, particularly in southern Europe, while northern European buyers are still reporting a good level of demand. In Italy, main producer AST is said to be focusing on commodity rather than less requested grades. Given squeezed margins and lower demand, many producers in Europe are now “standardising” their coil production due to the higher costs of producing certain less common grades.

According to a large coil buyer, the weaker demand of the moment is mostly due to prices remaining too high, considering the substantial slowdown in activity downstream. However, another source argues that, with inventories of nickel being low on the London Metal Exchange and prices fluctuating, coil and other flats prices will not weaken.

Italian stainless HRC remains at €2,500-2,550/t ex-works, with CRC at around €3,000-3,050/t. Most European producers are now quoting for December. However, in other European countries such as Spain and France, mills are beginning to ask for over €200/t increases for January delivery. At current coil sales values and amid skyrocketing costs, steelmakers are said to be selling nearly at a loss.

Natalia Capra France