Italian welded tube prices are increasing by some €35/tonne ($38) compared to the end of June following re-rollers’ hikes at the end of last month.
The hikes are in line with higher hot rolled coil contracts in Europe. Tube prices however continue to lag behind HRC values amid uncertainty dominating the market.
Over the past ten days, tube sellers have noticed some increased confidence and better demand also from the distribution sector, which continues to grapple with weak downstream consumption. Thanks to the latest increases achieved in Italy, discounts have lowered to 36-37 points. In the coming week, re-rollers are targeting to reach 35 points and will continue to implement gradual increases, Kallanish notes.
Tube sales in July are reported to be higher than the June average despite the market remaining challenging.
European HRC producers are pushing up values and quoting in Italy at €700/t base ex-works or delivered depending on mill, client and volume. Contracts have not yet reached this level as steelmakers are also going for gradual hikes considering the market fragility.
The target to reach 35 points for tube discounts is based on HRC prices at €650/t ex-works. If in the next few days, domestic values continue to increase, re-rollers will have to target 30 points of discounts before the sector shuts down for August stoppages, sources say.
Tube producers in Europe, like steelmakers, are facing high production, financial, transport and energy costs that the market downstream refuses to absorb. Many re-rollers have reduced output to balance demand and supply.
Natalia Capra France