The Italian domestic flats market, which was expected to soar in September but did not post the expected uptrend after the sluggish summer holiday, has gained pace after entering 2008. So far in the current year, while price increases have been seen once every two days during some weeks, hikes have been observed once every ten days during other weeks.
The base prices for HRC, which stood at around the level of €460/mt in January, were raised to a range of €620-640/mt in March. While sales at the levels in question are currently being concluded for June/July shipments, there is a shortage of supplies in the market in particular for thin specifications.
While in January the price for cold rolled material stood at the level of €520/mt in the Italian domestic flats market, it hovered around the level of €660/mt in February, and finally rose to the level of €700/mt in March. As regards galvanized materials, January's levels of €510/mt increased to €660/mt in February and to €710/mt in March.
We see that Italian mills made strong price hikes during January and February in order to catch up with the increase trend in global flats prices. Looking at the situation in March, while the rate of increase of prices has gotten smaller, it is possible that the increase rate will gain speed again on the back of the rise in the prices of import materials with the beginning of the month of March. Another remarkable point as regards prices is the fact that the price gap between galvanized and hot rolled materials has been narrowed down.
While the prices in the Italian domestic market are increasing, we also see that import prices as well as import offers are soaring on the back of the rising flats prices in the international markets. China is another factor impacting the Italian flats market. The extraordinary rise in Chinese prices with the introduction of China's export duty (current Chinese HRC offers have exceeded the level of $890/mt FOB) has led the prices in question not to be accepted in Italy. In addition, the price increases in countries which have mainly been supplying flat products to Italy, such as Egypt, and the fact that these countries are mainly concluding sales for summer shipments, are other factors. For example, Egyptian origin hot rolled material is being offered for June shipment at the level of €660/mt CFR.
The expectation in the Italian domestic market is that the price hikes will continue and that this situation will remain until the shortage of supplies comes to an end in the domestic market.