In the southern European flat steel markets the sluggishness from the summer holiday still prevails, while the economic turmoil in the US and Europe has started to be felt in flat steel markets.
Late Friday last week, the international credit rating agency Standard & Poors (S&P) has downgraded the US credit rating, and the European Central Bank (ECB) has decided to intervene. The fear that the economic crisis may spill into Italy and Spain is resulting in increased perturbation in flat steel markets in these countries. Nevertheless, due to the ongoing summer holidays, flat steel markets are quiet for the time being.
In previous weeks, domestic hot rolled coil (HRC) prices in the Italian domestic market were standing at €510/mt ($728/mt) ex-works. There has not been any significant price changes heard in the Italian flat steel market because of holiday, while demand has increased very slightly. In the meantime, if the euro strengthens against the US dollar, it is thought that domestic flat steel prices in Italy may decrease and the volume of imports may increase in return.
In Bulgaria, demand still slow as it was in previous weeks, while HRC prices have remained at previous levels. Latest HRC offers from Ukraine to Bulgaria were at $720-725/mt CIF. In the meantime HRC and CRC offers given from Turkey to Bulgaria, at $730-750/mt FOB and $900-910/mt FOB respectively are considered to be very high in Bulgaria.
In Portugal, flat steel prices have remained unchanged amid low demand. In the Portuguese domestic market, HRC prices are still at €610-610/mt ($857-871/mt) ex-warehouse, while HRC offers from Spain and Italy stand at €530-550/mt ($757-785/mt) CFR. These offers are not expected to during August.
Flat steel markets are not foreseen to revive until September, since the summer holidays will last until the end of August.
€1 = $1.428