Italian wire rod prices continue to decline amid a market lull that is not expected to end in July. Distributors’ and drawing mills’ order books are considered thin, and stocks remain high throughout the country. The deadlock is particularly being felt in southern Italy where economic growth seems to have frozen.
After the high level of purchases of March, demand from both distributors and end-users has declined substantially since April. This, coupled with competitive import offers from Turkey and North Africa, is causing buyers to adopt a wait-and-see mood, as they forecast domestic values to continue to fall, market participants tell Kallanish.
Sales from local steelmakers have now gone below the level of €900/tonne ($939/t) ex-works for drawing-quality material and are hovering at €870-920/t. This is down from €1,200/t ex-works at the beginning of May. Purchases continue to happen only back-to-back and competitive import offers at €710-740/t cfr Italy are contributing to slow domestic sales, sources suggest.
Meanwhile, northern European wire rod prices are also decreasing due to low demand and further scrap price reductions. Most sources expect further rod price falls in July.
On Thursday, however, hints of hope emerged in the market following the latest large sales by Turkish longs producers in the US and Asia.
Natalia Capra France
