Italian coil market perks up after Ilva news

Activity in the Italian coils market started to increase today, after Luxembourg-based steelmaker ArcelorMittal's buyout of Italy's Ilva ended uncertainty over the latter company's future.

Hot rolled coil (HRC) was trading in the €540-555/t ex-works range, although some suppliers were withholding offers and awaiting further clarity over market direction. One seller said offers could increase by €20/t in the next few weeks compared with end-July to early-August sales.

Buyers in the north hoped to get more competitive prices from southern sellers upon returning from holidays, with northern mills increasingly resolute in their offers. Prices for HRC in the northern market are around €570/t, with one mill aiming for as high as €600/t ex-works given full order-books for the fourth quarter — although most do not see this as an achievable price.

The majority of sources expect ArcelorMittal's ownership of Ilva to change pricing dynamics in Italy and the wider market, reducing the spread between southern and northern European pricing.

Turkish mills were heard to have offered HRC into Italy at €530-540/t cif last week, but one importer said the price may have been withdrawn. Cheaper deals, at around $570/t fob (€490/t) Turkey, were also heard into Italy from Turkish traders.

But Turkish mills will be reluctant to be too aggressive into Europe after receiving a 50pc duty on exports to the US. Domestic mills and the European Commission are watching Turkish volumes closely, given that it has issues selling into key end-markets, such as the US. This could partially explain recent Turkish coil offers into south-east Asia.

Some say EU mills are not pushing for more increases as they do not want to influence the European Commission's definitive duties on third-country imports.