The Italian flat steel market still continues to lack clarity following the return from the summer holidays. Over the past month, all eyes have been on Taranto-based steel producer Ilva, the partial closure of which was ordered by judges due to environmental issues but which continues its production operations for the time being. Further developments regarding Ilva continue to be awaited. Accordingly, most Italian flat steel producers are inclined to postpone their own decisions for the moment. For now, hot rolled coils (HRC) are still offered at €490-500/mt ($617-630/mt), cold rolled coils (CRC) are at around €560-570/mt ($706-718/mt), while hot dip galvanized (HDG) coil prices are standing at €540-545/mt ($680-687/mt), all ex-works.
Before the summer holidays, flat steel prices had not increased more than by €10/mt ($13/mt), while market players now doubt whether such an increase can be maintained, especially on the back of sharp declines suffered in iron ore prices recently. The situation is worsened by the fact that the economy continues to languish, while end-use sectors are not replenishing stocks. Steel production has been reduced both in Italy and elsewhere in Europe, but it will be difficult for such reductions to have a counterbalancing effect. In this uncertain situation, the few requests made to producers recently have been met by applying old prices, i.e., the prices which prevailed prior to the summer holidays. This does not apply for requests for large volumes: in such cases, Italian flat steel producers are inclined to postpone transactions until clarity is restored in the market, when they hope will happen in the first days of September.
€1 = $ 1.26