Market Overview and Current Price Trends
Italian hot-rolled coil (HRC) prices have remained stable since mid-November, with a slight increase compared to the beginning of the month. However, demand remains weak, and sales volumes are restricted. Some Italian mills are preparing for extended shutdowns during the December holiday season, which is expected to reduce supply and potentially lead to price hikes.
Shutdown Plans and Order Book Updates
Several Italian producers have announced plans for significant production reductions to balance supply and demand. One producer, in particular, is set to halt operations for three weeks between December and January and will not accept January orders, instead taking only February orders. As a result, the Italian steel market is expecting limited supply in the coming months.
Sources confirm that Italian mills have largely completed their order books for December. This upcoming reduced production capacity could prompt an increase in demand from buyers looking to stockpile in advance of the shutdowns, particularly since one major producer will not be able to fulfill January orders.
Pricing Expectations and Market Sentiment
Italian HRC producers are targeting a price of €600 per tonne ($631/t) delivered. However, market participants, including both buyers and sellers, remain skeptical about achieving this target in the current market environment. The import market is currently quiet, as offers from abroad are aligned with domestic contract levels, and there is also the risk of additional tariffs.
Despite the muted sales activity at current price levels, the absence of imports has led sellers to believe that prices in the European market could indeed rise to €600-610 per tonne. Many European producers are pricing their HRC at these levels, but actual sales remain limited.
Service Centre Activity
In Italy, service centre material is currently contracted at an average price of €570/t delivered, with some lower contracts reported at €550/t delivered. Service centres are preparing for shutdowns starting the second week of December, with operations expected to resume on January 7th.
In summary, the combination of planned shutdowns, limited supply, and a possible increase in demand as customers stockpile ahead of the closures could push prices higher in the coming weeks. However, the uncertainty surrounding the feasibility of price increases remains a key concern for both buyers and sellers in the market.
