While trading activities haven't fully resumed yet due to most market players being still on holiday, Italy's government crisis is contributing to make Italian flat steel market future uncertain. The Italian parliament in late June revoked the legal immunity as regards pollution that ArcelorMittal received when it bought the Taranto-based Ilva plant. The new law should enter into force on 6h September, ending the legal protection at Europe's largest steel plant. ArcelorMittal said that it would be forced to close the site if the legal safeguards for the company were removed by the Italian authorities. ArcelorMittal and the outgoing government are still trying to resolve the issue. Meanwhile, ArcelorMittal's announced increases throughout Europe have not had any effect on both Italian and European domestic prices yet.
On the contrary, according to sources hot rolled coils (HRC) base prices in Italy have decreased by €5/mt on the high end compared to the period before summer holidays, to €440-455/mt ($488-505/mt) ex-works. According to sources, HRC prices are at about €470/mt ($522/mt) ex-works in Northern Europe, against the €500-510/mt ($555-566/mt) ex-works level that ArcelorMittal is seeking. ArcelorMittal and other steelmakers could try getting price increases in early September, when all buyers return to the market and need to replenish their stocks. However, a negative sentiment prevails as raw materials prices are declining globally and flat steel demand could remain subdued in the European market for the rest of the year.
€1 = $1.11