No end appears in sight for the upward race of flats prices in Italy's domestic market. Product quotations are clearly on the up, and this situation looks set to continue into the future.
The first months of the currrent year have seen a powerful surge in quotations, with so far an increase of €60-70/mt observed with respect to February levels and a hike of €160-170/mt registered since December last year.
The causes of this price acceleration are varied. In first place, it has been due to the increased input costs. The rises in the cost of raw material (primarily iron ore), of energy prices and of petrol are having a strong effect on the prices of finished steel products.
In second place, the number of offers from non-EU countries has declined somewhat. The rebound of domestic demand in emerging countries, combined with the steps taken by the Chinese government to restrict steel product exports, have caused a slowdown in arrivals in Italy of material from China, and also a reduction in available volumes from countries like Russia, Iran and Brazil.
Also to be mentioned is the psychological game being played by Italian domestic steelmakers in their own national market: the producers cotinue to close and then reopen their sales, creating an expectancy that the market could be facing a shortage of supplies.
Currently, demand also appears to be weak. In spite of the fact that prices continue to rise, traders are just buying the strict minimum, deterred by the very low levels of real demand. Indeed, the automotive and mechanical sectors seem to be in difficulty at the present time.
The only uncertainty regarding the general upward trend is due to fears for the overall economic situation. Looking to the near future, all opinions are in agreement. Market players think that the current trend in flats will continue at least until the end of the first quarter. Those operatingin the market say that quotations can continue to rise insofar as the factors behind the current upward surge (production costs, freight, raw materials) are independent of the actual market dynamics. The forecasts for continued upward price movement have been given substance by the hikes in quotations announced by the major European producers to take effect from April 1.