Slab procurement disruption paralyses Italian plate activity

Italian plate producers have either stopped sales completely or are deliberating longer over quotes amid the market uncertainty caused by the situation in Ukraine.

Given slab feedstock deliveries from Ukraine may not be completed, plate producers tell Kallanish they do not know what price to quote at present. This is all the more so considering the continuing escalation in gas prices and uncertainty over how much non-CIS slab alternatives will cost in the coming weeks. Italy is a net slab importer and local plate processing is fed in large part by Ukrainian slab.

As a consequence of the Russian-Ukrainian conflict, on 24 February the Dutch TTF Natural Gas Index showed an increase of 50.18% on the previous day, after rising by 11% on 23 January. From a level 70, the gas price index ballooned to 134 on 24 February.

This, combined with the uncertainty over slab procurement, is causing companies to freeze their sales activity and rush to replace slab usually bought in Ukraine with other supply sources. A similar situation is evident in Italy for other products, such as coil (see separate article) and raw materials like HBI and pig iron.

Before the war started, Italian heavy plate contract prices were steadily climbing following the latest hikes announced by mills in February. Demand for S235, the very basic grade, and premium 355 grade throughout Europe is sustained and plate mills are quoting lead times for the second quarter, in April and May.

Domestic plate contracts have attained the level of €1,000/tonne ($1,117/t) for S235, with €50/t extras for the premium 355 grade.

Distributors have expressed concern regarding plate procurement and lead times, which are expected to lengthen further as end-user demand remains robust. Some are concerned they will not be able to procure plate in Italy because of the conflict, as import offers are few and not always competitive.

Natalia Capra France