Supply disruptions fail to spur Italian HRC demand

The Italian hot rolled coil market remains particularly weak despite delivery times lengthening due to the current production disruptions in Europe.

Even though customers in Italy are seeing their coil deliveries from ArcelorMittal delayed by as much as two months, to July and August, the ones who spoke to Kallanish do not seem to be concerned by the current supply issues.

Service centres will continue to try and increase their prices, as the entire supply chain is slowing, but say they will not rush to buy coils. Demand and consumption are reduced compared to last year. There is a price limit beyond which customers refuse to pay as the economic downturn in Europe is no longer supporting high values.

Re-rollers are also affected by a similar reduction in tube sales despite a shortage of certain grades, and so are sheet sellers. Tube and sheet shipments in the second quarter will be significantly reduced due to the low order intake for most coil derivatives seen since mid-February.

The large re-rollers continue to buy from Asia where offers of HRC for 20,000-30,000-tonne vessels are extremely competitive, rumoured to be at around $745-750/tonne cfr Italy. Service centres are neither buying volumes on the import market – at $770-780/t cfr – nor buying domestic material, but are instead adopting a wait-and-see attitude. On the bright side, however, the much-missed automotive sector is ordering more compared to Q4 2022 and gradually increasing car production.

Italian contracts for HRC are flat compared to last week at €850-860/t ($932-943) base ex-works. It is now becoming challenging to sell at €880/t base. Lead times are for between June and August depending on steelmaker.

Natalia Capra France