Italian re-rollers increase prices on expensive coils
Italian re-rollers are cutting back their discounts and planning to halt sales in response to recent price hike announcements from European hot rolled coil producers, according to industry sources.
In Italy, tube discounts are starting to decline. According to one re-roller, he is at 45 points and unwilling to go below this level. Nonetheless, the level of 47 points is still available in the market. A number of tube suppliers, steelmakers and service centres who spoke to Kallanish agree that HRC, tubes, and sheets will see significant price increases in the near future.
Europe is anticipated to strengthen its defences by granting some of the most recent safeguard review requests from Eurofer following the recent US tariff announcement.
“Now, a new phase is beginning,” a re-roller source remarks, “we must embrace it and learn to control the new macrotrend that will involve higher steel prices and a new management of the supply chain that will be strongly impacted by the additional protectionism.”
Ports will be filled with material starting on 1 April. In order to avoid paying duties, some re-rollers and service centres confirm they will continue to leave material in consignment at the port. Because there will be fewer coils available in Europe, prices will rise and businesses should be prepared to handle their supply chains in a different way in order to adjust to increased pricing and decreased volumes, the source comments.
Prices for European HRC are predicted to rise to €650/tonne ($676.3/t) base delivered in the upcoming weeks.
In light of the present high cost of coils and related processing expenses tube discounts are set to drop to 40 points in the coming weeks. According to another tube seller, “40 points will not even suffice to return to profitability. With the prices we have today, nobody can afford to buy coils at €650/t.” He adds that the commodity grade tube of 40x40x3mm should reach 37–38 points, exceeding €800/t when HRC prices hit €650/t.
Despite the anticipated price rises for all flat products, projections indicate that demand and consumption will likely remain constrained, resulting in subdued volumes for the year.
Natalia Capra France
Italian re-rollers enact price increases on high costs
Italian re-rollers are contemplating a price increase and a reduction in tube discounts, sources tell Kallanish.
One re-roller is enacting a price increase of €50/tonne ($52/t) effective immediately, resulting in a reduction of discount levels to 46 points. The company aims to achieve a discount level of approximately 43-44 points within the first ten days of February.
The increases are deemed critical for margin recovery, amid an unsustainable gap between current prices and costs. Costs for re-rollers continue to increase. Donald Trump’s return is expected to result in the implementation of global safeguards and antidumping measures.
“We expect that the majority of Eurofer requests will receive approval from the European Commission, and an increase in protectionist measures is likely to complicate coils import. Re-rollers with a pricing structure based on global HRC purchases will face significant challenges due to the forthcoming regionalisation of the market and increased coil costs,” a tube maker says.
Another agrees that the safeguard review is highly anticipated, and the unfavourable euro-dollar exchange rate will make it more expensive to import coils. Demand for welded tubes is on an upward trajectory; however, the cost of hot-rolled coil in Europe is projected to approach €610/t base delivered in the near term.
Currently, the tube discount levels in Italy are holding steady month-on-month at 48-49 points. With a 48% discount, a workhorse grade such as the 40x40x3 is priced at approximately €670/t ex-works, resulting in negative margins for some.
To effectively manage costs and secure some profit margins, this grade should be positioned at a price point of €800/t, a target most companies are likely to pursue in February. Should this level remain unattained, various sources indicate that tube capacity reductions could be required before the end of this quarter.
At present, European HRC prices have risen in contracts to an average range of €575-580/t base ex-works. The current market demand appears to be flat; however, there are expectations that buyers may resume purchasing activities in the coming days, primarily due to a lack of viable alternatives from the import market.
A mill source started offering HRC at €620/t delivered in Italy, with expectations to reach this level in the coming days.
Natalia Capra France
EU re-rollers increase prices on costlier HRC
Multiple Italian re-rollers, along with tube manufacturers in various European nations, are enacting price increases of €50/tonne ($52), industry sources tell Kallanis
The increase is effective immediately and is considered essential for margin recovery, given the unsustainable nature of current prices versus costs. Production costs for re-rollers are on the rise, influenced by escalating prices of hot rolled coil in Europe, coupled with additional import restrictions stemming from the EU’s safeguard measure review initiated this week.
Protectionist measures are affecting major coil processors and tubemakers, who procure substantial coil tonnages each year from third countries to meet their extensive processing requirements.
A significant number of re-rollers in Europe are expected to carry out extended production halts to align supply with demand during the holiday period.
Multiple sources confirm to Kallanish that production will cease for approximately three to four weeks. Given the present low inventory levels, the production halts are likely to result in diminished product availability, with shortages expected for specific grades.
The market is quiet after buyers finalised their purchases for December. January contract values, however, are expected to rise in accordance with the price hikes.
European HRC prices have increased in contracts to an average of €560-570/t base delivered, while derivative prices in Italy have shown stability, with tube discounts flattening on-month at 47-48 points.
ArcelorMittal is increasing coil prices by €20/t in Europe for delivery in the new year. Lead times at the steelmaker’s plants in Europe are now extended to February and March. For the few February allocations left of HRC, new asking prices are at €630/t base delivered. Prices for hot-dipped galvanised coil are also being pushed up, to €750/t base delivered.
The European Commission’s investigation will determine whether the EU safeguard measure on steel imports needs amending to reflect recent market developments, following a request by 13 Member States. The investigation will be concluded by 31 March 2025. Any resulting decision may become applicable as of the start of a new quarter – 1 April 2025 – including with a new TRQ volume.
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Italian re-rollers plan production cuts, coils trend higher
Multiple Italian re-rollers and pipemakers are set to execute extended production halts throughout December. Two companies tell Kallanish of their decision to suspend operations for four weeks in order to align demand with supply. Current prices and margins are meanwhile considered unsustainable.
“The purchase cost of hot rolled coil has diverged from the selling prices of tubes. The repurchase of coil is not contributing positively to our operations, necessitating a reduction in production levels,” one tubemaker comments.
The implementation by the EU of robust protectionist measures has resulted in companies that previously sourced the majority of their HRC volumes from outside the EU facing a reduction in procurement options. This has also meant an increase in HRC prices. The conditions exist for European HRC to exceed €650/tonne ($685.29) base in the medium term, the source adds.
Downstream, re-rollers and service centres are experiencing notably low margins and financial losses attributed to the elevated costs of production and HRC. Re-rollers are anticipated to raise their prices in January as they adjust to the new market conditions, following extended production cuts and reduced availability.
“Should consumption fail to recover in 2025, numerous facilities in Europe may face closure,” another tubemaker says and adds that a discount of 48 points is not sustainable. This puts commodity tube prices at approximately €700/t ex-works.
Italian coil prices are slightly higher than they were at the start of the month. Conversely, downstream, prices for derivatives have remained stable. Cutting production significantly is also a way for re-rollers to reduce production costs.
European steel producers are currently discussing potential price increases for HRC in January. One major steel producer has informed buyers that, in January, it will request an increase of €20/t. In Italy, HRC is being contracted at an average of €555-560/t base ex-works, or €570/t delivered, stable on last week.
A producer plans to significantly reduce output this year to align demand and supply, and will temporarily halt operations at its plant for three weeks between December and January. The company will not take bookings for January and will exclusively accept orders for February due to the prolonged closure. Italian producers have largely completed their December order books.
The availability of material in Italy is expected to be limited due to the impending stoppages. Acciaierie d’Italia is currently operating at a diminished capacity. Italian HRC producers are aiming to increase their prices to €600/t delivered. However, customers remain sceptical about the feasibility of this target in the current market conditions.
One leading European producer is currently pricing HRC at €600-610/t base ex-works or delivered in various European markets. Current sales activity at these price points is virtually non-existent, but the absence of import alternatives leads sellers to believe this level will soon be reached (see Kallanish 28 November).
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Italian plate producers seek increases
Italian heavy plate producers are increasing prices by €30/tonne ($32) compared to last month for S275 and S355 grades. Sources tell Kallanish the market is quiet due to the sector’s August hiatus.
Local re-rollers are requesting €700/t ex-works for S275 grade and approximately €730-740/t for S355. Last month, they made significant efforts to lower their prices, resulting in import offers no longer being competitive.
According to a mill source, prices have hit rock bottom and are expected to rise in upcoming contracts. Given the current cost of production and imported slab values, it is evident that July contract prices are not sustainable for producers, as they are operating with minimal profit margins. Certain producers are starting to reject selling at the low levels seen in July.
During July, customers of all sizes showed a reluctance to make purchases, and sales volumes have been consistent but low. Various buyers took advantage of competitive import prices in June, resulting in a decline in local sales volumes. Last month, the cost of Asia-origin material was at around €600-620/t cfr Italy.
According to information from distributors, there is a continued stagnation in demand downstream. The current booking price for Asian slab is at approximately $550/t cfr Italy. However, for larger volumes, there are discussions about a slightly lower price of $540/t cfr. As of now, domestic S275 grade transactions are taking place at approximately €650-660/t ex-works in Italy. S355 is meanwhile being traded at around €680/t, sources suggest.
Natalia Capra France
