EU HRC: Italian prices creep up, buyers sanguine

Domestic Italian hot-rolled coil prices crept slightly higher today, but there is still a reticence to purchase from some buyers because of the pervading uncertainty.

Luxembourg-based steelmaker ArcelorMittal has filed court documents about its intention to withdraw from the lease agreement for Italian steelmaker Ilva, but the government suggests the company has no basis to leave and that it will try to prevent any termination of the contract.

The Argus daily Italian index rose by €0.50/t to €389.75/t ex-works following rising import prices.

A leading domestic mill is targeting a €20/t rise, although it is reluctant to announce an official offer — customers have suggested around €410-420/t ex-works may be its target level.

Another seller is offering around €395-400/t ex-works and has transacted slightly below this level. Traders remain bullish, citing import prices as high as €420/t cif Italy.

But steelmakers suggest buyers are sanguine about the Ilva situation and appear unconcerned about tightening supply. Import offers from one Turkish steelmaker were around €405/t cfr base, and it uses S235 as its base grade. A trader was bidding below €400/t cfr and expected to receive a response soon.

Italian mills said they were encountering import competition at €395-405/t cfr with trader margin stripped out.

One trader was offering to the north at around €420/t cfr, above the Italian price, but material was available at lower levels and service centres were not biting. The Argus daily domestic northwest Europe HRC index was stable at €413.50/t ex-works.

Two mills in the north still have December availability and are competing with imports at around €400/t ex-works to win business.