The Italian flat steel market appears to have already started its summer break. After the slow erosion of prices over the previous two months, no changes have been seen in the last two weeks. Accordingly, in Italy hot rolled coils (HRC) are still offered at €485-490/mt ($596-602/mt), cold rolled coils (CRC) are at around €550-560/mt ($675-688/mt), while hot dip galvanized (HDG) coil prices are standing at €530-535/mt ($651-657/mt), all ex-works.
Domestic flat steel producers, which had already been defending tight profit margins, have managed to avoid significant price decreases in the pre-holiday period. On the other hand, end-user demand does not seem to have improved and the market remains permeated by an atmosphere of uncertainty, exacerbated by recent macroeconomic news. Traders consulted by SteelOrbis predict that the situation in the market will remain static at least until the end of August. Flat steel stock levels are extremely low and this should ensure some restocking activities upon the return from the holidays, which in turn may prevent further price decreases and possibly contribute to a small rebound in price levels.
Meanwhile, import market activity is still quiet and import offers continue to be less competitive compared to those of domestic producers.
In conclusion, no significant changes are expected in the Italian flat steel market in the short term. The hope is that in September the much longer-for recovery in demand will materialize, but the medium-term prospects are not positive and market players believe that demand will generally remain subdued even in the latter part of 2012.
€1 = $1.228