Italian sellers attempt coil derivative increases
Coil derivatives are still experiencing weak prices, while sales volumes for sheet are struggling to improve. Some service centres are raising sheet pricing in line with re-rollers, but there is little push for hikes right now, and slow consumption is hurting any hike attempts. The outlook remains negative and market participants believe the impasse will continue throughout the third quarter, Kallanish hears.
Coil service centres report a lack of demand, with agents stating that customers are purchasing 1,000 kilogrammes, "one pack at a time", demanding quick delivery and showing no commitment. On average, customers are purchasing much smaller quantities than previously.
Within this slow market, some service centres are actively pursuing higher volumes and are willing to offer discounts to ensure sales. Some service centres are raising hot rolled sheet prices to €750/tonne base ($805) ex-works, which barely allows them to make a profit given the cost of hot rolled coil. The current price tag has not yet been realised, with the prevailing range now at around €710-730/t delivered. "Customers are unwilling to increase their bids beyond that," one source comments.
A service centre that sells most of its production on the export market is successfully offsetting the sluggish domestic market through its well-established international sales channels. However, it does not see higher consumption and prices abroad. Meanwhile, as a result of Europe’s safeguard quota revision, all Italian welded tube makers are raising their prices, to reflect the growing expenses related to HRC imports.
One HRC manufacturer in Italy is increasing pricing by €30/t, asking for a base ex-works level of €660/t, as present contract rates are very close to actual costs. This is being done despite market uncertainty and slow demand. Domestic prices have not yet increased and remain at €620-630/t base ex-works.
A re-roller reports that discounts were effectively decreased by two points last week, or €30/t. The company is reducing discounts by a further two points this week. Other tube makers are cutting their discounts by four points with immediate effect. However, a source says the market is moving up by no more than two points every week, and he expects a gradual but steady rise. Italian tube discounts stand at 40 points at present, down from 42 at the beginning of June (see Kallanish 7 June).
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Anonymous
Very good overview of the weekly steel market.
Anonymous