The Italian HRC market is slowing down due to lower demand for secondary products
Roll prices in Italy are stable week after week, with moderate activity throughout the value chain, Kallanish notes.
Demand remains weak and is limited to small batches. Service centers report similar conditions in the rolled metal segment, where high inventory levels are gradually being covered by current real demand.
Both coil buyers and derivatives consumers are taking a cautious wait-and-see attitude amid negative sentiment related to the US-Iran conflict, which is leading to increased logistics and energy costs.
Indexed HRC contracts continue to meet the needs of most service centers, and spot purchases are limited to small volumes to fill inventory gaps.
Regarding imports, transactions are limited to delivery with payment of duty (ddp), with traders assuming CBAM risk. However, traders are raising prices for raw materials to about 700 euros per ton (810.73 US dollars per ton), while alternative sources are scarce. Turkish raw materials are offered at a price of about 620 euros per ton of cif or slightly lower, but buyers must additionally pay duties and CBAM costs, since quotas have been exhausted.
As a result, import prices are currently uncompetitive compared to domestic prices, and buyers mostly refrain from importing.
One source notes that the conflict, combined with a potential revision of the ETS that could change CBAM calculations, is changing the context again. Another casts doubt on the viability of the upcoming protective measures, warning that the market, which is already suffering from a sharp increase in war-related costs and stricter quotas, may run the risk of shutdowns.
Several sources confirm that end consumers are already changing their purchasing behavior. Faced with rising costs, buyers are reducing volumes and focusing on short-term needs. "Given how rapidly the international situation is changing, planning has become extremely difficult. The introduction of strict protective measures in this context would have a significant impact on the entire value chain," says one of the buyers.
Prices for hot-rolled sheet in the secondary market are also stabilizing at the level of 770-780 euros per ton at the plant, and service centers are focused on 800 euros per ton. The short-term surge in demand observed after the conflict has now come to naught. Buyers rely on stocks purchased at lower prices. Their visibility is limited, and it is increasingly difficult for them to cope with further price increases.
Market participants express