<article><p class="lead">European hot-rolled coil (HRC) prices slipped today as northern mills looked to sell into Italy because of continued weak domestic demand.</p><p>A German mill was heard to have sold to an Italian service centre at €470/t base delivered. German steelmakers and service centres are suffering because of the reduction in demand from automotive sub-suppliers. Special deals are available from mills in the country, particularly for higher grades. Sheet prices in the north are also under pressure as distributors look to destock, while Italian service centres want low inventories to free up working capital.</p><p>Italian mills are getting some inquiries from Germany, but cannot compete with local producers, despite the apparent gap between Italian and northwest European HRC prices. The <i>Argus</i> daily northwest EU HRC index slipped by €2/t today to €468/t ex-works, while the daily Italian index fell to €447.25/t, leaving the discount for Italy at €20.75/t.</p><p>Some southern mills are still talking of €15/t increases, but customers are not accepting rises at present and there is strong buy-side consensus that prices will not move higher. One large Italian producer was reportedly heard to have acquiesced to €460/t delivered. </p><p>Many buyers are expecting reductions, with some producers still struggling to sell September deliveries. One northern HRC mill has already reduced its October delivery offer by around €15/t to €470/t ex-works, and prices as low as €455-460/t ex-works are available. </p><p>Mills are firmer on cold-rolled coil and hot-dip galvanised pricing, with the former as low as €530/t delivered at the beginning of this week in Italy. At least one Italian producer is now seeking €540/t ex-works and has so far been resolute. </p><p>Some buyers are increasingly concerned about the likelihood of disruption at ArcelorMittal Italia. The company is running at vastly reduced rates, but still employing around 10,000 staff, and is in talks with the government over the Crescita law, which removes its immunity for the environmental issues at the plant under its previous owners. It also faces a mandated closure of blast furnace 2 at the site.</p><p>Any potential disruption could be somewhat offset by other ArcelorMittal plants — the company has decided to delay the announced idling of its Krakow blast furnace, and the European market in general still has overcapacity. </p><p>Imports remained uncompetitive. One Turkish producer was offering 4,000t at €467/t base cif, substantially above domestic pricing. Another steelmaker sold 12,000t in three parcels, at an average €455/t cif for cold-rolled coil, pickled and oiled, hot-dip galvanised and dry HRC.</p><p>The<i></i><i>Argus</i> northwest Europe HRC forward curve remained backwardated today, given the growing consensus there would be no price increase without a step-change in demand. The front month August was €469/t, while September slipped to €468/t and October €466/t. There is an expectation the pricing environment could be even tougher once mills return from summer maintenance and are running at stronger production rates.</p></article>
