The Ilva crisis is still having an impact on the Italian flat steel market: prices are moving up both in the domestic and the import segments amid limited supply. Moreover, a lot of foreign hot rolled coil (HRC) suppliers are targeting sales to Italy, trying to benefit from the market upturn.
The lower allocation, the increased local scrap prices and the fact that the Taranto-based Ilva plant is not offering any material have pushed HRC domestic base prices up to the €390-400/mt ex-works range, against the €380-400/mt levels that were valid last week. Another domestic producer is now offering HRC at €410/mt ex-works, though local sources report that such a price has yet to consolidate in the market. Also, according to sources CRC and hot dip galvanized (HDG) coil prices have trended sideways in the past week at €480-500/mt, but they are getting more and more close to the €500/mt level.
As reported previously, the strong possibility of production disruptions in Italy - the shutdown of the Taranto plant would mean 300,000 mt of HRC less monthly - has strengthened the position of foreign suppliers. According to sources, from last week Turkey has sold up to 60,000-70,000 mt of HRC to Italy within €390-400/mt CFR. Offers are now coming at €405-415/mt CFR, sources report. In the meantime, India’s JSW is in the market with €415/mt CFR, while Russia’s Severstal has offered €405/mt CFR (duty paid), up around €10-15/mt over the past week. Egypt’s Ezz Steel is in the market with the highest price to Italy at €420-430/mt CFR.
The ongoing capacity cuts, such as ArcelorMittal Poland's idling of its Krakow blast furnace, are expected to also support HRC prices in northern Europe, though for now they have remained stable over the past week at €410-420/mt ex-works.