Transport to Italy may come under pressure from virus

The movement of metal and alloys into Italy could come under threat after some traders reported difficulty in securing trucks to cross the border, although no major disruptions have yet been confirmed.

Some truck drivers are become increasingly reluctant to enter northern Italy since the region saw a surge in the number of people affected by the coronavirus, metals market participants said today. The World Health Organisation said the number of confirmed cases in Italy — the main hotspot in Europe for the outbreak — had surpassed 300 as of 26 February. Some reports indicated that the number of cases in Italy had jumped to 400 at time of press.

In addition to concerns about deliveries being completed, the potential for a truck driver shortage is also raising questions about whether freight costs will go up, traders said.

But despite the growing health scare, raw material suppliers and steelmakers in Italy continue to produce and purchase raw material on the spot market for consumption. A silicon metal trader reported a sale of 5-5-3 grade silicon metal for spot delivery to an Italian aluminium producer in the north of the country, adding that the customer was planning to run its production facility as normal.

Argus today assessed 5-5-3 min 98.5pc Si silicon at €1,850-1,950/t ddp Europe works, up from €1,835-1,920/t on 25 February.

Italian steelmaker Arvedi yesterday confirmed to Argus that its production and deliveries are unaffected and there are no official restrictions on entry to the Cremona area where its facilities are located. That said, some market participants suggest that there have been a few cancelled finished steel orders in the domestic market as a result of truck drivers being reluctant to travel to Cremona.

One trader said that most alloys produced or already at Italian ports from outside Europe are still being delivered to customers as normal. The mills are likely to continue buying material but may not want to shake hands, he said.

Another trader said he had not seen any transport disruptions to or from Italy, but said some business meetings were now being postponed because of quarantine measures and precautions.

The bigger concern for now remains the virus' impact on tourism and economic growth in Italy, with one financial analyst commenting that the situation makes another recession in Italy "more likely than not".

By Anuradha Ramanathan and Thomas Kavanagh