Those who predict a fall in the prices of merchant bars may be in for a disappointment, according to Enrico Fornelli, commercial director of northern Italian steelmaker Beltrame.
"Beltrame will close its French facility in Valenciennes for eight weeks starting from the end of the first week in August," Mr Fornelli declared. The halting of production will allow the replacement of the entire furnace and the renovation of the rolling line. The investment which is expected to run into tens of millions of euros will inevitably lead to a drop in production levels. Mr Fornelli continued, "For at least two months, we will meet the shortfall in production from Valenciennes with production from Italy, meeting the needs of customers and markets which were previously met by the French facility....Let us not forget that in Europe the month of August is an active period and not a period of closure as is the case in Italy"
We may not have to wait too long for the impact on prices. Mr. Fornelli stated, "The production shortfall lessens the pressure on sales. However, the initial effect on prices will be the consolidation of actual levels. Subsequently, possible upward adjustments to listed prices are not to be excluded."
The Beltrame official said that it would not be possible to rely on warehouse levels in order to meet the drop in production; "Our stocks are not overabundant, rather they are in equilibrium."
Beltrame Group, based in Vicenza in northern Italy, is the leading European manufacturer of merchant bars, and also produces special sections. Together with its French subidiary Laminés Marchands Européens, bought in 1994, the Italian group operates plants in Italy, France, Belgium and Luxembourg, with an output of over two million metric tons per year.