As demand remains slack in specific sectors, and above all in the automotive sector, due to the global financial crisis, the Italian flat rolled market is showing continuing signs of weakness. Meanwhile, Italian producers are trying to overcome this difficult situation by planning extended closures, but such moves do not appear sufficient to solve the problem.
Currently, the prices of hot rolled coils (HRC) in the Italian market are standing at €390-400/mt ($519-546/mt) , while the prices of cold rolled coils (CRC) are standing at €480-490/mt ($655-669/mt) and hot dip galvanized (HDG) prices are at €450/mt ($614/mt). All these prices are ex-works, with 60-day payment and for shipment in the first half of February. However, given the difficult market situation, with budgets to be met by the end of the year and also taking into account the current global financial crisis, some producers may sell at lower levels.
Foreign offers, though with 90-day payment, are not proving attractive at the moment and have failed to influence the local Italian market. Only one offer for cold rolled coils (CRC) has been quoted at €460/mt ($628/mt), but it didn't have any success. The expectations for real consumption in the near future are still pessimistic, due to the financial crisis which has resulted in the layoffs of many workers.
Apparent consumption presents quite positive signs, though these should be taken with caution. In fact, some purchases have been reported from traders with low levels of stock, who have considered those prices to be very attractive.
The situation is particularly difficult for the Italian service centers, which are working with a very low profit margin and a decrease of 30-50 percent in output volume compared to last year.