Italian candy bar manufacturers are raising prices by another 30 euros per ton ($35.29 per ton) this week to cover increased costs and high scrap prices. According to Callanish, this is the latest price increase in a series of consecutive increases between March and April.
This step is met with resistance from buyers and agents. Several sources say they are "confused" by the pace of the increase, arguing that the increase happened too quickly, without giving the market time to digest it or see if it can be spread further.
This is happening against the background of weak economic conditions and declining consumption, when buyers declare that they can no longer afford to buy the same volumes as in previous months, at the current price level.
Sources describe a fragmented market in which manufacturers are showing optimism, increasingly divorced from reality, while the processing sector is facing low demand, financial problems, non-payments and payment delays.
Prices for bars in the domestic market have increased significantly compared to the pre-conflict level. Current contracts for bars are priced at 330-355 euros per ton, which is equivalent to 750-775 euros per ton, including additional sizes. Factories are now asking for 370-375 euros per ton, as are large distributors.
"Officially, prices are rising, but how long can a manufacturer continue to sell several trucks at higher prices? In the lower reaches of the rivers, we cannot afford high prices, the market is not able to accept them. Soon we will see the consequences of this in the lower reaches of the rivers," the source claims.
One agent says he was selling at reasonably elevated prices with lower volumes, which is about a third of what he was selling before prices started rising in early March.
Meanwhile, prices for the sections are gradually rising, as the market leader raised prices by 30 euros per ton before the pipe and wire exhibition, setting a new level at 830 euros per ton. Currently, the average price for shipments of the first category is 800-820 euros per ton with delivery. However, there are reports of some prices below 800 euros per ton from the warehouse.
Rising transportation costs are becoming another factor of pressure on the market. It is reported that many truck drivers refuse to load and transport materials at current fuel prices, which have risen sharply due to the conflict in the Middle East. Drivers say they are awaiting a government decree that is expected to reduce fuel costs.
Author: Natalia Kapra
Kallanish.com
