Genoa, Italy – “After the storm comes calm”, says a proverb. Starting from that, some positive signs are ahead: the increased steel production and consumption in India, the several new business opportunities opened in Iran after the annihilation of the economic sanctions, the efforts of the Chinese government to cut some hundred millions tons of steel capacity supported by state funding, the first talks between the gas and the oil producers to reduce the offer on the market to raise the prices and many more.
Summarizing what happened in Italy during January, the negotiations started later than usual, the 11th of the month, with the mills wishing some small price reductions for their purchases. The first spot orders on the domestic market have been settled with 3 – 5 € reduction and the monthly contracts with the European suppliers signed with 5 € reduction, but for smaller quantities than usual. During the month, due to the low production rate (also because of the Algerian rebar import limitations) and the mills high raw materials inventories, other 5 € of reduction have been applied on the spot domestic market. To limit the seller’s pressure to deliver the scrap, several mills reduced their daily reception time. Other mills strikes limited the scrap deliveries. The arrivals at the Italian ports in January were still important: abt 39 Kt the scrap, abt 167 Kt the pig iron and abt 87 Kt the HBI. If the vessels arrivals, the scrap deliveries and the low mills consumption are added up, it can be said that the mills inventories are now well recovered. The scrap dealers are always reporting some delays in mills payments.
Following the January official average prices reported (€/pmt delivered):
New arising E8
Demolition scrap E3
The forecast for the February prices and contracts are oriented to further reductions both in terms of volumes and prices.
Some words about ILVA. According to the last Government Decree, February the 10th is the deadline to receive the letter of intent from the potential buyers, for the purchasing or the renting the company. On the press several names are showed as potential buyers but up to now any LOI has not been officially presented. The Government confirmed also the 16th of June as the deadline for the deal closing with the potential buyer/s. Cleaning up and revamping works are in progress, with some delays, and the monthly steel production limited by the general economic environment and the particular company situation.
Pig Iron – H.B.I.
During January two HBI cargoes arrived at the Italian port of Marghera, one from Venezuela and one large vessel from Black Sea. Last HBI offers are reported around 165/170$ pmt CIF Italy. The January pig iron arrivals showed the same high level of December, about 167 Kton, all from the Black Sea ports. The pig iron offers are now quoted around $195/200 pmt CIF for March shipment. The inventories at ports and mills remain well recovered.
Source: Alocci Rappresentanze Industriali