Some apparent demand for welded tube is forecast to resurface in the second half of June as both distributors and end-users in Italy have low stocks and are expected to come back to purchasing. The European market is currently in a deadlock that started several weeks ago, market sources tell Kallanish.
Real demand is also particularly subdued. Discounts are at some 33-35 points in Italy. Values fell significantly in May, in line with dropping hot rolled coil prices. The tube price weakness is seen continuing, with discounts declining by a couple of points per week over the next few weeks.
Some sources however believe the bottom is not far off because HRC import offers seem to have stopped falling. A stabilisation in both imported and European HRC levels is expected by end-June. However, for the next two days, values for coil and its derivatives will continue to edge down, sources believe.
Some European countries, such as France and Germany, are also going through a heavy destocking phase. Sources also expect German buyers to come back to restocking by the end of the month, which should trigger a more balanced market in terms of demand and supply.
Natalia Capra France
