The Italian plate market is “… paralysed” and affected by low demand, uncertainty and falling prices, sources tell Kallanish. Domestic plate prices are losing as much as €40/tonne ($45.9/t) compared to the beginning of January. There is however a large gap between the distribution sector’s price and the mills’ prices.
Mills’ material is now at €520-530/t base ex-works for the basic quality S275. It was at €560-570/t base ex-works three weeks ago. However, distributors are still managing to achieve a selling price of €580-590/t delivered when selling to end-users.
Apparent demand is lower than real demand because end-users are refusing to build stocks and only purchase material for which they already have commitments. They are accepting distributors’ offers of up to €40/t more than mills because distributors have a range of stock available. This is allowing end-users to implement over-the-counter purchases and avoid stocking mill quantities of material at a time of market uncertainty.
The Italian market is therefore unsure with patchy demand. Slab prices, now at $400/t fob for CIS material, and stable m-o-m, are the key. Depending on any further movement in this area, the current domestic price for plate is seen weakening further in February.
In the meantime, domestic coil prices are also slipping further (see Kallanish 31 January). This happens just as the national institute of statistics (Istat) says that Italy is technically going through a recession. This is due to a second consecutive quarterly contraction in the country’s GDP in the fourth quarter of 2018.