EU HRC: Uptrend in Italy continues

A large buyer has turned to imports after recent upticks in the Italian hot-rolled coil (HRC) market and expectations that production cuts will be felt more strongly in material for delivery after the summer.

Russian material for August shipment was booked at €470/t cif Italy, according to several market participants. Offers from an Indian producer stood at the same level, but lengthier shipment made it less competitive, while offers from sellers in southeast Asia were at €495-500/t cfr. Turkish mills were last targeting $520-530/t fob before the Eid holiday last week, although offers were more recently heard at $510/t fob.

The Argus northwest Europe daily index is unchanged at €478.50/t. The discount for Italian material moved to €4/t from €5/t previously.

Although some sellers in Italy still have July availability, market participants expect that output cuts will filter into higher pricing for September-delivery HRC and still anticipate another price increase announcement. That said, mills have struggled to achieve their target levels so far this month, as end-user demand across the continent remains low, with some seeing it worse than in May.

A northwest European seller is understood to have sold to Vietnam at $505/t cfr last week, and mills are still offering into Middle Eastern markets in a bid to fill production.

But others say that with the downtrend in Asian pricing seemingly over, some buyers may be prompted to lock in volumes soon and less reluctant to settle contracts for the second half of the year.

Questions remain about the finished steel stock levels at Italian plants ahead of their maintenance periods, which are extended for some. Some say that semi-finished inventories could also mean that some mills continue production, albeit at a reduced rate.