Some Italian longs demand seen resuming before stoppages

Prices for some long and tube products are forecast to stabilise next month as the pace of decline is slowing, particularly for beams and merchant bars, say some Italian service centre sources. Sluggish demand for all flats, tubes and longs however continues, with buyers focusing on destocking.

Sources tell Kallanish the imminent production stoppages at Spanish beams and merchant bar mills should support Italian prices next month. Both beams and merchant bar values have fallen considerably less than other products such as rebar, for which the many producers and buyers create a very competitive market in Italy.

According to sources, meanwhile, the German government is currently discussing a significant reduction in gas supply to energy-intensive companies, including steel producers, due to the Ukraine war impact. Some long steelmakers have this week stopped sales and are beginning to say prices will increase in July as a consequence, although no official announcement has yet been made.

Buyers for beams, tubes and merchant bars are seen going back to purchasing in July before summer production stoppages are implemented throughout Europe. Italy is currently a two-tier market, with weak activity in the north and virtually no activity in the south, which relies heavily on public projects that are delayed because of the current economic uncertainty, Kallanish hears.

At present, domestic merchant bar remains at €780-800/tonne ($820-841/t) base ex-works. Including size extras, values reach €1,200-1,240/t ex-works. The first category of sections also remains at €1,330-1,350/t including size extras, distributors indicate.

Welded tube demand is also particularly weak but local re-rollers are said to have resumed shopping for hot rolled coil feedstock globally. While some tube makers in Italy are also reducing production and implementing line stoppages, they have re-modelled their price lists, taking into account energy, transport costs and lower HRC prices. According to the new price lists, tube discounts are at around 20 points.

Natalia Capra France