Italian HRC market at a standstill due to lockdown measures

Wednesday, 25 March 2020 16:45:23 (GMT+3)   |   Brescia
       

The Italian market is in standby mode after the implementation of lockdown measures by the local government. All non-essential industries have been ordered to temporarily stop operations to tackle the coronavirus emergency, but those businesses that are in a continuous production cycle are exempt, while other activities must prove to local prefects that they cannot stop their operations. In this context, both local flat steel producers ArcelorMittal Italia and Arvedi have continued production, but the latter could be forced to stop production as the prefect of Taranto is currently evaluating the actual need to maintain current production, while local unions are demanding that the plant be shut down to safeguard the health of workers and their families. In any case, flat steel buyers are suspending their activities today, March 25, as per the latest decree by Italian prime minister Giuseppe Conte, and they will reopen on April 3, unless otherwise specified. Accordingly, it is not clear where local producers will get their orders from, considering that northern Europe countries are also dealing with the spread of the virus. In this context, there is no interest in import offers, while local hot rolled coil (HRC) prices have remained at the €440/mt ex-works level in the past week. It is hard to say what will happen in the coming weeks. The Italian market is expected to remain at a standstill at least until early April, but the lockdown period may be extended. If not, a resumption of local demand is expected, although domestic service centers are well stocked after buying some volumes before the Italian government tightened its measures. According to sources, HRC prices trended have sideways in northern Europe as well in the past week, at €470-475/mt ex-works. As reported previously, the major European carmakers have shut down their sites, while several steelmakers have reduced production.


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