A market which is traveling at two speeds; positive for producers but presenting greater difficulties for distributors – this is the picture of the Italian flats market which emerged from a discussion on the current situation, which included the participation of Roberto Bevilacqua (Siderurgica Pugliese), Giovanni Carli (Ciocca Lamiere), Eva Fuchshuber (Voestalpine), Walter Pasinetti (Globalsider) and Enrico Vettorato (Alba Siderurgica).
Following the compression observed in quotations from April to the start of the summer holidays, producers began to approach the market with a different stance from the start of September. They sought and obtained increases of around €25-30/mt for hot rolled coils and also more restrained rises for cold rolled and galvanized. These hikes, however, ran into a bottleneck in the market, especially when it came to the service centers. Due to the weakness of the market and the high levels of competition, the service centers have had great difficulty in passing on increases to downstream purchasers and so far have only been able to recoup part of the increases paid to the mills. The price hikes have not significantly trickled down yet to the retail warehouses that obtain their supplies from the service centers.
Taking a look at real demand, the slowdown in Europe is also making its impact felt on Italian end-users. In general, demand in Italy is not very impressive, with just few exceptions. As regards supplies, the Chinese presence in the market has diminished somewhat, and in general there has been a reduction in volumes arriving from non-EU countries. Distributors' inventory levels currently range from medium to low.
There are contrasting predictions for the market situation in the near future. On the one hand, the producers, considering the likelihood of increases in raw material costs, are aiming for a further hike in quotations. The service centers, having experienced an erosion of their margins of late, share a similar approach. On the other hand, the negative mood prevailing among end-users, alarmed by the international financial crisis and the weakness of the dollar, may have a braking effect on the price rising tendency in the market.