Welded tube prices to increase on short supply

The European hot rolled coil production disruptions are affecting coils derivatives deliveries and slowing tube production. Italian distributors and re-rollers report a concerning situation of supply for welded tubes for which certain grades are hard to find and even commodity grades are beginning to suffer slow deliveries.

ArcelorMittal communicated to customers ten days ago that delays are expected to deliveries across Europe due to recent fires that impacted one blast furnace in northern Spain and another in northern France (see Kallanish passim). Some customers in Italy say they are seeing their coil deliveries delayed by as much as two months to July and August.

Welded tube prices continue to lag behind the European HRC hikes. With sources expecting further increases in Europe and re-rollers’ HRC procurement difficulties deepening, tube makers are implementing price increases. Current discounts in Italy remain flat at 27 points but they will go down from next week to 25 points gradually lowering to 20-21 points in May.

The large re-rollers continue to buy Asia-origin material which will be delivered in July. While ArcelorMittal confirmed to Kallanish that HRC deliveries are delayed, major Italian producer Acciaierie d’Italia’s output is heavily reduced which leaves buyers in the country with Arvedi as the only reliable supplier. At the same time distributors report a challenging market downstream and difficulty to increase prices due to a real slowdown in consumption compared to last year.

Structural tubes and lower thickness material is hard to find. Buyers are beginning to see some longer deliveries also for some commodity grades. Despite the weaker economy and consumption, distributors are expected to push up their tube and other coils derivative prices. Kallanish notes.

Natalia Capra France