Italian wire rod prices flatten, weak demand continues

Italian wire rod prices are stable on-month. Both sellers and buyers however continue to report low volumes. Some sales were achieved in June but with orders being carried out back-to-back. Sellers say they are playing it by ear and are reporting persisting low visibility, Kallanish notes.

The market is missing large volumes. All distributors and drawing mills are buying one or two truckloads per week. Producers are implementing stoppages and often supplying customers from stock. Price increases have been mulled but multiple sources say in this market any price rise would not stick, and the relative price stability is already considered a success.

For July, buyers have bet on price falls, but producers aim to hold on to current levels. Steelmakers may have to face higher production costs. Scrap prices are not falling this month in Italy due to shortages. The Italian government may end the tax credit for energy-intensive sectors such as steel and scrap the exemption from electricity transport and distribution charges. As Federacciai president Antonio Gozzi warned last week, this move risks increasing electricity costs in the country by 35% for steelmakers (see Kallanish 4 July).

Wire rod producers will now consider their results for the first half of the year. Based on their margins, volumes achieved, costs and government help, they will decide on their pricing, volume and production strategy for the months to come.

While some small restocking is expected in July and longer maintenance stoppages are planned in August, all eyes are on September which is nevertheless not seen bringing back significant sales volumes. Import prices at present are at domestic levels. Italian drawing-quality wire rod remains at €570-600/t delivered, sources suggest.

Natalia Capra France