The Italian heavy plate market has reached a standoff after prices began to decline a few weeks ago following unprecedented increases in March and April, sources tell Kallanish.

The lull is due to the international wave of falling prices for all flat products, uncertainty and competitive import offers from Asian countries. This has caused apparent demand to completely disappear in Italy and the entire value chain to freeze. Both producers and distributors lament an almost complete lack of demand, which is spreading some fear and pessimism throughout the market.

The latest workable price for the basic grade S275 from domestic players some ten days ago was €1,600-1,650/tonne ($1,683-1,735) base ex-works, with Asian-origin import deals done at an average of €1,400/t cfr Italy. Towards the end of March and April, the high point of the range for domestic S275 was as high as €2,000/t ex-works.

Today, prices are unclear as there are virtually no sales taking place. Producers are keeping their cool and not offering material, satisfied with full order books until July. They admit however that the market is correcting downwards.

Sources in the industry forecast that demand and sales activity will resume in June, and expect domestic prices to align with import values, somewhere in the range of €1,400-1,450/t for S275.

Despite the current uncertainty, plate prices are not seen collapsing thanks to strong European end-use demand. The current lull is a necessary price adjustment period that should help restart demand in the coming weeks, sources point out.

High energy and transport costs persist, worsened by longer slab procurement lead times and disruption, which have caused two producers to idle their plants. The 355 grade remains in short supply because of supply difficulties for the high-grade slab needed to produce 355. The European market is also missing some 1.1 million tonnes of plate typically sourced from Russia and Ukraine.

Some northern European producers are said to have long lead times, to the end of the third quarter. Order books are being filled with supply to infrastructure and wind farm projects throughout Europe.