Flat steel demand continues to be lackluster in Italy. Transaction activity remains fairly steady but weak, with end-user demand far from being at satisfying levels. Uncertainty persists in the market, and service centers are maintaining a wait-and-see approach and are managing their inventory levels very carefully in order to avoid risks and be prepared in case of a sudden worsening of business.
Currently, in the local Italian market, base prices for hot rolled coils (HRC) stand at €525-535/mt ($761-776/mt) ex-works, down €5/mt compared to two weeks ago. However, service centers find it difficult to collect orders even at this price level. Current quotations seem to be relatively higher, and so market operators think that buyers' price idea is more toward €500/mt ($725/mt). The situation for cold rolled coils (CRC) and hot dip galvanized (HDG) is more balanced though, with quotations respectively at €620-640/mt ($899-928/mt) ex-works and €580-600/mt ($841-870/mt) ex-works.
On the import side, there is certain pressure coming from Chinese offers for CRC which are now standing at $820/mt (€565/mt) CFR, and so are very interesting for Italian buyers. In the meantime, Chinese offers for HRC are in line with domestic prices in Italy, and so in this case interest from Italian buyers is weak. Also Turkish offers are not competitive at present, standing at €545-550/mt ($790-798/mt) CFR, although the local Turkish market seems to have slowed down in the last few days. In the near future, import quotations for Turkish coils may trend downwards, also taking into account the latest strengthening of the euro against the US dollar.