The Italian steel market is on hold with the country still in lockdown due to the coronavirus outbreak as most steel mills are still not working and only few have been allowed to re-start sales and deliver their products, market sources told S&P Global Platts on Tuesday.
Italian prices for hot-rolled coil and rebar are being reported unchanged over the last two weeks. HRC is selling at around Eur440/mt base ex-works. Export rebar is at Eur435-440/mt FOB Italian ports with domestic rebar reported at around Eur420/mt ex-works.
“Market industries and associations are all asking to re-open gradually the factories and to slowly resume productions if the government will give the green light. There are expectations that from these levels prices will go down further if the demand and supply will be not balanced,” a senior market source commented on Tuesday, echoing other industry sources.
Assoferment, the Italian association of steel and scrap service centers and distributors, asked the Italian government to re-open all economic activities that were suspended. “Otherwise the effects on the general economic system will jeopardize the country’s social stability,” Tommaso Sandrini, president of Assofermet flat products, told Platts Tuesday.
The association echoed steel producers group Federacciai, which also asked for a re-opening. Both associations stressed nevertheless that the resumption of business should be gradual and take into consideration measures to keep workers safe and in agreement with unions.
Assofermet and Federacciai have different views on how to address imports, and in particular market safeguards. As reported Monday by Platts, European steel producers federation Eurofer and Federacciai last week asked the EC to make the safeguards more restrictive. Assofermet responded by asking the EC to keep them unchanged and said the changes proposed by steelmakers would be “detrimental.”
According to Assofermet, the market is “under pressure, not due the misrepresented import flows into the EU market, but to the weakness of the steel-consuming businesses within the European Union.
“The increasing protectionism is weakening our industries,” the association stated. “Forcing them to pay for more expensive steel is not the way to recover competitively. An additional level of protectionism would only create an artificial price increase of steel in the EU market, allowing EU steel producers to not follow the innovation path and to sit on granted profits.”
Assofermet and senior industry sources said that in order to address the disruptions caused by the halt in production due to COVID-19, the EC should grant additional credit lines to all EU companies that operate in the upper part of the value chain: raw material, steel production, steel distribution and steel processing.
— Annalisa Villa