A sector in evolution - thus briefly we may describe the current situation in the Italian domestic flats market. Though the market in question is still striving to find suitable reference prices, the general direction of price movement has already been decided, i.e. upwards.
After the return from the Christmas-New Year holiday period, the scenario in the Italian flats market changed radically compared to the situation observed in the latter part of 2007. Two new developments began to exert a strong influence. In the first place, the effect of increased input costs was felt. In the second place, the recovery in demand in the Far East countries, joined to the Chinese government's tighter controls as regards steel product exports, have resulted in a reduction in offers of material from non-EU countries, and in particular from China. These two factors have resulted in an increase in the quotation levels coming from the steel mills.
This maneuver on the part of the mills was immediately accepted by the market, also due to the low levels of inventory at commercial warehouses and at service centers. Currently, increases of €20-30/mt are observed with respect to the prices paid in the days just before the Christmas holiday. The hikes in question have also been passed on to end-users, whose stocks are likewise at low levels. Nevertheless, real demand still appears to lack brilliance and is following a trend which is completely different from that of apparent demand, which is very positive. Returning to the issue of prices, a more rapid rise is seen for hot rolled product prices, with smaller increases seen for cold rolled and hot dip galvanized. In particular, a narrowing is being seen of the price gap between HDG and HRC.
Looking towards the future, the market players who were interviewed say that they are expecting further increases in quotation levels. Specifically, they are anticipating more substantial increases in CRC and HDG prices.