A market which is experiencing difficulties, both as regards quotations and demand - This is the picture which emerged of Italy's welded tubes and tubular goods market from a discussion which included the participation of Marco Berera and Pasquale Mazzetti (Acciaitubi), Enrico Jannone and Guido Farsi (Jannone Tubi), Andrea Musso Piantelli (Tubex Commodities), Arrigo Vanoli (Vanoli Ferro), Enrico Vettorato (Alba Siderurgica) and Michele Vicini (Vicini).
The current situation - Italy's welded tubes and tubular goods sector appears to be in difficulty, with prices declining and demand levels not great. The current impasse in the sector is caused by the combination of a number of factors. In the first place, the difficulty is caused by the high levels of inventory. In the first few months of the current year, Italian distributors resorted to purchasing non-EU material on a massive scale, given the strong increase in the sales prices of tubes in Europe's domestic markets. The result was a decisive upward shift in warehouse stocks, the effect of which was felt particularly from September on. Added to this, demand has also begun to slow down due to the reduction in construction activity, both residential and industrial, which has been aggravated by the difficult credit situation seen in recent months. The combination of these two factors (above-average stocks and consumption below the seasonal norms) has also given rise to a contraction of apparent demand, which has been very weak in recent weeks.
The interaction of these above-mentioned forces has led to the drop in quotations seen in the last part of the current year - in spite of the fact that the purchase prices of coils have remained substantially unchanged.
Future prospects - Market players don't expect changes in the current trend before the Christmas holidays. With regard to predictions for the first quarter of 2008, however, a couple of possibilities are suggested. On the one hand, the reduced competitiveness of welded tubes from China (due to increased internal consumption and the expected cancellation of the VAT rebate for exports), and also the probable rise in prices for coils, should lead to an upward correction in quotation levels. On the other hand, the situation as regards inventories and weak demand could hinder the rebound of quotations.