In the Italian flat steel market, demand has been increasing since the beginning of May, while prices have been stable compared to the end of April. Sources interviewed by SteelOrbis said that an improvement in consumption has been witnessed in the past 15 days, though prices have not increased due to a series of negative factors such as the negative effect of the US dollar on prices and the lack of upward movement in steel prices in China and elsewhere. Furthermore, the absence of a significant increase in import volumes reflect the fact that domestic production volumes are sufficient, even though the largest Italian steel plant, Taranto-based Ilva, is producing far lower tonnages than in the past, at around 5-6 million mt annually compared to a peak of 12 million mt before the global financial crisis. Local producers are making great efforts to increase prices, even slightly. The same companies are still experiencing difficulties in managing production in an economically viable and profitable way.
Inventory levels are still being kept at quite low levels in the domestic market. Even market players with no liquidity problems prefer not to accumulate material, since there are no forecasts of a significant rise in prices that would justify speculative purchases.
However, as mentioned, domestic flat steel demand has increased and local producers have healthy order books at the moment. Currently, domestic producers' base prices in
Italy are at €395-400/mt for hot rolled coil (
HRC), at around €470-480/mt for cold rolled coil (
CRC) and at around €450/mt for hot dip
galvanized (HDG) coil, all ex-works. Meanwhile, there are import offers from countries such as China at €385/mt CFR for commodity-grade
HRC. Local demand for
CRC has been increasing in the Italian market, even if Chinese traders have been offering
CRC at €430-440/mt CFR. Lastly, HDG prices are still weak because of oversupply in the market.
Although there are uncertainties in both the global and Italian domestic market, local sources hope that the recent improvement in consumption will prevent any price decreases and will pave the way for price increases instead.