EU HRC: Some Italian buyers accept rising market

Italian domestic hot-rolled coil (HRC) prices edged up again today, as some buyers began to accept the market would approach €400/t ex-works in the coming week or so.

Some buyers were still concerned about the cancellation of orders by Ilva, which has led to some activity on the import front, and for traders looking to move quayside inventories.

One trader recently sold a small lot of S235 from a main port at €417/t ex-stock for immediate delivery, it said. Domestic mills are targeting €400/t ex-works and perhaps above, and there is begrudging acceptance from some buyers that this level might be acceptable in the short term. Some small quantities, not yet representative of the wider market, are already changing hands at €400/t ex-works, sellers said.

An import order was confirmed yesterday at €410/t cif for 2,000t, for S235 material loading in January and arriving in March. Argus' weekly cif southern European assessment firmed by €10/t to €405/t today.

The future of Italy's sprawling Taranto works is still unclear, with ArcelorMittal denying talk that it will operate the site until May. ArcelorMittal chief executive Lakshmi Mittal will meet Italian prime minister Giuseppe Conte in the coming days.

Italian distributors have whittled their stocks down to more normal levels, and some end-users have returned to the table given recent production disruption. Some mills still say that buyers seem unconcerned about availability going forward. With around 1.8mn t left of the European Commission's HRC safeguard quota, this is perhaps unsurprising.

Nevertheless, current import offers are up quite substantially from a week or so ago. Indian mills have signalled that they will not be below €410/t cif, while Turkish mills are at around this level and slightly higher.

One northwest European steelmaker has been in the Italian market more regularly of late, and is offering at comparatively attractive prices, according to buyers. The mill still has December availability, buy-side sources said.

The market in the north is still lagging Italian gains, as it focuses on contractual negotiations, closing the differential between the two regions. Argus' daily Italian index rose by €4.50/t today to €394.25/t ex-works, while the northwest index was again static at €413.50/t ex-works. This took the Italian discount to just €19.25/t, its lowest since 24 July. The Italian index has risen by €10.25/t over the past week, while the northwest index has slipped by €0.50/t.

Ostensibly, some spot deals in the north are still being done close to the €400/t ex-works mark, as some hungry mills look to displace imported supply. Import prices into the north are currently at parity or below offers into Italy, an atypical phenomenon.

Plate catching up with coil falls

Pricing in the plate market has slipped over the past month or so, with mills looking to move product.

The less liquid plate market often lags movements in the more active coil segment. Argus' ex-works Italian plate index slipped by €20/t to €445/t today.

In the northwest European plate market, there has been some pressure over the past month from mills in central and eastern Europe. Some sales were heard done as low as €480/t delivered into Germany from certain mills, which are trying to maintain high output and reduce unit costs per tonne despite the weak market.

Imported tonnes in Antwerp were being offered at around €500/t delivered, according to traders. Argus' northwest European plate assessment dropped by €10/t to €475/t ex-works.