Italian distributors are overcharging mills amid sluggish demand
Italian distributors noted a slight increase in orders in April, despite the Easter holidays and generally sluggish market conditions.
During the month, several factories increased prices for long products, while large distributors maintained competitive prices compared to manufacturing plants.
One major distributor told Kallanish that the market is still at a standstill and stagnating, although the company has managed to maintain sales through lower prices and cheaper materials.
The plants increased the cost of long products, rebar, mesh, and long products for retail, but apparently sold lower volumes than in the distribution segment due to high prices.
May remains uncertain for now, as it started with very low demand. Another distributor says that this month is usually busy, but activity in Western Europe is expected to be particularly low due to the large number of bank holidays in France and Germany. The source believes that the increased prices for long products will remain until May.
Some enterprises have sold significant volumes of products on the export market and declare that they are in no hurry to sell them on the domestic market, intending to maintain a high price level. Two large distributors confirm that they do not plan to purchase goods at current prices and have sufficient stock for May.
The Italian delivery bar is currently priced at 360-385 euros per ton (423.45–452.85 US dollars per ton), while manufacturers are asking for 390 euros per ton delivered and considering further increases. Current prices, including additional sizes, range from 780 to 805 euros per ton.
Small buyers say that they purchased very few goods from manufacturers last month due to higher prices. Agents report low demand, as all buyers are buying only for urgent needs. One of the agents reported that Kallanish sales volumes for the first four months were in line with last year's levels, but May started extremely slowly. Sellers are taking a wait-and-see attitude, and forecasts are impossible in the current market conditions. Those with sufficient stock, such as distributors who can immediately supply the material, have the best position in this market.
Meanwhile, demand for corrugated board remains average, and prices are stable compared to the end of April and amount to 820-830 euros per ton. Several sources believe that the current high prices for long products are unacceptable, and a reversal of the trend is expected.
Author: Natalia Kapra
Kallanish.com