The local flats market in Italy has continued to be characterized by low demand and a general softness in domestic flats consumption. Contrary to the global market, which has experienced several uptrends in demand and also in product prices (such as, for example, in the Far East and US), the situation in Italy's flats market has been consistently poor. In addition, players in the market state that there are no indications of any market improvement. Taranto-based integrated plant Ilva is currently operating at under 50 percent of its full production capacity, and it is reported that Ilva's quotations for flat products will be suspended until the end of June.
In this context, the common perception is that an early attempt aimed at increasing production would lead to a new decrease of prices.
The local flats market situation may be said to be characterized not just by a general inactivity, but, worse than foreseen, by a total immobility. There are no signs of any kind of demand release from industry, and the government stimulus plan is not producing the desired results.
Demand in the local flats market is still very low: domestic flats consumption year-to-date is down by between 30 and 40 percent. 80 percent of mills are now idle for at least one day a week, most often on Fridays.
In the export market, at the moment Italy does not possess any advantage in its offers for 2.0 mm HRC to the US, which would enable it to bear the high freight and delivery costs. The only hope of survival is represented by the export market for some thin HRC products, though the quantities in question are modest.
SteelOrbis has learned that in the local Italian market ArcelorMittal's 2 mm HRC is standing at base price levels of €350-360/mt, for September production. According to market sources, real transaction prices are lower than list prices, i.e. at around €335-345/mt ex-mill.