Low consumption and competition challenge Italian service centers

Many sellers are seeing a significant decrease in consumption compared to last year and anticipate a slow April due to the holidays in Italy. Coil service centers are currently not properly reflecting coil price increases on the downstream market.

Standard grade hot rolled coil deliveries are hovering around €920/ton ($991). Apart from slow consumption, the problem in the market is that some service centers are selling at lower prices to gain volume, sources said.

Buyers restocked in January. But stocks are lasting longer as demand is much slower now. Price competition among service centers intensified. Mills' coil sheet prices are expected to continue to increase in the second and third quarters.

Meanwhile, coil prices continue to increase and major HRC producers are already considering further hikes. The shortage and lack of imports in Europe is also continuing.

There is some talk that HRC prices could go up to €900/t ex-works and €1,000/t for cold rolled and hot dipped galvanized coil in the next few days.