Italy braces for coil hikes amid CIS disruption

Italian hot rolled coil producers have stopped sales due to uncertainty related to the Russian-Ukrainian crisis. They are expected to return to quoting in the first March week at considerably increased prices compared to February levels, sources tell Kallanish.

The war in Ukraine and future sanctions on Russian steel will cause slab and coil shortages in Italy. Availability of both heavy plate and HRC is expected to shrink as producers are grappling with procurement issues. Some buyers in Italy are rushing to find alternative sources of supply in other European and non-European countries.

This is also touching raw materials such as pig iron, for which prices are seen increasing in the short term on shortages (see Kallanish 25 February). Meanwhile, producers of cold rolled and hot-dip galvanized coil are also suspending quoting due to uncertainty, and preparing significant increases.

HRC contracts in Italy currently remain at €880-920/tonne ($983-1,028/t) base ex-works, amid a few uncompetitive import offers starting at €880/t cfr Italy.

Demand for domestic HRC is expected to be strong when producers return to quoting, Kallanish hears. Italian steelmakers were asking for €920-930/t base ex-works for HRC before they stopped sales.

ArcelorMittal in Italy is also said to have halted sales, together with most Italian service centres who are expected to go back to selling on Monday or Tuesday.

Meanwhile, some Italian end-users that sell truck and tractor components in the CIS region are expected to experience deliveries and sales difficulties as a consequence of the war.

Elsewhere in Europe, other coil makers are either stopping sales or increasing quotes. Liberty Galati has pushed up HRC prices for April delivery to €1,000/t ex-works. The company says prices of CRC and HDG, as well as organic coated sheet will also be amended upwards (see separate article).