EU HRC: Italy moves up further

Italian hot-rolled coil (HRC) buyers have been forced to pay higher prices with mills firm in their offers and looking for further increases.

The Argus daily Italian HRC index increased by €1/t today to €426.50/t ex-works. The northwest European index was unchanged at €436/t ex-works.

An Italian mill is now targeting €440-450/t ex-works, up from €430-440/t last week, after concluding some deals. Another seller is now firm at €440/t ex-works.

The future of another mill is still shrouded in uncertainty, which concerns some buyers and is much-needed leverage for mills given relatively quiet demand. Activity across Europe is slowing ahead of the Christmas holiday and the financial year end.

Import offers into Italy appear to have stabilised this week, with prices heard at $480-510/t fob from Turkey. Many see the workable price for buyers at $480/t fob and below, with sluggish demand likely pushing producers to consider lower prices, although there was talk of the target for a large buyer at $480-490/t fob Turkey. A Turkish mill said it saw demand at $490/t fob in Italy.

Workers unions in Italy said the Italian government's new industrial plan for the Ilva assets included an 8mn t/yr ramp up of production in addition to a new electric arc furnace in Taranto to compensate for blast furnace 2, which is due to be taken off line on 19 December.

In the north, long-term contracts remain the primary focus, with mills trying to achieve €450/t ex-works and above. Some deals have already been done, but most are still under discussion with mills and buyers, who are in no rush to settle.

A Russian steelmaker offered into Antwerp at around €448/t cfr including duty, but no deals were heard done. This price looks uncompetitive compared with domestic offers. Mills are comparatively firm in their offers, but are still eager for volumes when discussing contractual tonnes with buyers, and have not yet seen any real uptick in demand from the automotive supply chain.