The situation regarding the Taranto-based Ilva steel works that could cause some significant disruptions in the local hot rolled coil (HRC) market in Italy has so far not had an effect on domestic pricing. However, the potential for supply shortages has triggered livelier interest on the import side. Domestic HRC prices in the Italian market have trended sideways in the past week, remaining at €380-400/mt ($418-440/mt) ex-works levels. ArcelorMittal has cancelled some orders and will not accept any others at the Ilva plant at least for the next couple of months. "Ilva is the last option" when a buyer needs to order some material and the current contracts could be diverted to other ArcelorMittal plants, according to a local source. However, this has not had a big impact on supply yet as HRC availability is still good in the market. The Ilva issue is likely to cause disruption in the supply chain in the longer term, sources believe.
It is rumored that another Italian producer is aiming at obtaining price increases for January shipments, targeting €410/mt ($451/mt) ex-works. Meanwhile, foreign suppliers are trying to take advantage of the fears of certain shortages and, according to sources, ex-Turkey offers have already reached €400-405/mt ($440-446/mt) CFR for January shipments, with deals closed recently at around €390-395/mt ($429-434/mt) CFR for at least 30,000 mt. Russian producer Severstal has also been selling December production HRC at €390-395/mt ($429-434/mt) CFR recently, up from €385-390/mt ($424-429/mt) CFR level two to three weeks ago.
€1 = $1.10