Italian stainless flats market continues to suffer

The Italian stainless flat steel market continues to stagnate. Demand downstream remains weak, with prices low for coil derivatives such as sheet and tube, sources tell Kallanish.

Distributors’ stocks are reported as medium in Italy and medium-low around Europe, but distributors are refusing to buy due to their subdued sales activity. Service centres believe hot and cold rolled coil prices are too high, and continue to purchase small volumes. The companies surveyed reported extremely negative results in the third quarter, with a slight improvement seen in Q4, albeit still losses. Concerns remain for 2024.

All European countries are being affected by low demand and consumption. In Germany, three distributors have gone bankrupt and more are expected to suffer the same fate.

Stainless sheet producers are not managing to increase prices, which are hovering at some €2,600/tonne ($2,835) ex-works, with stainless CRC at slightly below €2,500/t. Sheet prices are not being raised due to the aggressive commercial strategies of distributors and service centres, who are chasing volumes.

In Italy, stainless CRC is pegged at €2,460-2,500/t delivered and HRC at around €2,300/t delivered on average. Mills in Europe are completing January order books, with one quoting February lead time. Steelmakers’ order intake across Europe is low and Italian producer Acciai Speciali Terni is stopping production to balance demand with supply (see Kallanish 12 December).

The low prices of coil derivatives are causing inventory write-downs. Italian coil buyers believe mills should decrease values by at least €200/t. With the current high production costs, however, steelmakers prefer to keep their prices steady and implement production stoppages.

Natalia Capra France