Stagnation deepens in Italian longs market

Italian long steel demand and prices continue to weaken in a stagnating market. Market participants are beginning to wonder how long this can last, while some see the need to decrease steel prices further to allow several end-user projects to resume. The state of the economy does not support the current high prices, Kallanish notes.

Merchant bar sales are being concluded every week but only for very low volumes. Producers however prefer to lose orders rather than accept lower values. Italian domestic merchant bar prices are hovering at €300-330/tonne ($328-360) base delivered. Including size extras, prices are at €700-750/t, sources suggest. Sources say that a workable level that may move some volumes is about €280-290/t delivered.

Wire rod prices are declining to €640-650/t delivered (see separate article) and orders for downstream products are also weak, while some more demand is reported for sections. The beams market is however also stuck, with sales back-to-back and volumes low. Prices nevertheless remain mostly stable.

The first category of beams stands at €780-790/t ex-works but cheaper material offered from other EU countries is expected to drag down domestic prices. Both producers and distributors are dealing with tight margins and no improvement is seen this month in volumes or consumption.

The longs market outlook for March and the second quarter remains negative, with the looming possibility of a strong price decrease.

Natalia Capra France