The gap between Italy and northern Europe has widened in terms of hot rolled coil (HRC) prices. In the meantime, import business activity remains limited amid still-sufficient stocks.
As service centers continue to oppose mills’ higher offers, prices in the Italian domestic market have trended sideways in the past week at €440-445/mt ex-works. According to market players, downstream consumption remains low and distribution continues to rely heavily on the stocks that were purchased in November when prices were at their lowest.
The situation is different in northern European countries, where prices have strengthened in the wake of a better apparent demand, going from €470/mt to €480/mt ex-works. According to sources, the difference between northern and southern Europe in terms of price has prompted several German users to buy coils from Italian producers at lower prices compared to those available locally. For this reason, producers in the Italian market hope to be able to raise domestic prices in the coming weeks.
In this, they are also supported by solid offers from third countries, in particular those from Turkey which are standing at €470-480/mt CFR Italy, while bids are rare and mainly below €460/mt CFR. Turkish producers are currently unwilling to grant discounts taking into account both the good sales they have been able to close domestically and the upward trend of scrap prices. “The EU is still melting local stocks with neither Turkey nor the CIS having to rush to sell as the local mood is good at the moment,” a Turkish trader said. Russia’s Severstal sold some sizeable lots to the south of the EU in the first half of February at around €465-470/mt CFR for March production, SteelOrbis has learned.