After the decree issued by the Italian government allowing Taranto-based major Italian steel producer Ilva to continue its operations and the revocation of the Taranto court order issued on July 26 for the seizure of Ilva's upstream facilities, Taranto prosecutors have today, December 6, turned down a request by the company for the return of semi-finished and finished steel products (around 1,800 mt) produced by Ilva starting from July 26. Ilva is still not selling, while market players are eagerly awaiting the reopening of purchase negotiations with the company. Meanwhile, in the Italian market, flat steel prices have showed strong increases after the ones recorded on week ago. In fact, hot rolled coils (HRC) are now offered at the base price of around €500-520/mt ($645-671/mt), cold rolled coils (CRC) are at about €570-580/mt ($735-748/mt), while hot dip galvanized (HDG) coil prices are standing at €550-570/mt ($710-735/mt), all ex-works.
Undoubtedly the Ilva case has influenced prices, but - as stated by operators consulted by SteelOrbis - it should be noted that in recent months local prices were much lower compared to those observed in the European market. Indeed, the local Italian prices did not allow adequate levels of profitability. Therefore, the Ilva case has just accelerated a realignment process that was already in the air before the closure of the Taranto-based plant, as witnessed by the price increases issued by steel producers such as ArcelorMittal. According to market sources, the upward trend has not come to an end yet.
The price increases, however, still do not in any way reflect the demand situation. Flat steel demand has not improved, as purchases continue to be based on immediate needs and to be limited to strictly needed volumes.
€1 = $1.29