Italian steel market report: 2017 will be the year of uncertainty and instability

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Stahlschrott (Foto: Marc Weigert)

Genova, Italy — Goodbye to the 2016 thinking that 2017 may well prove to be a landmark year for commodities and raw materials. But today, seeing what happened worldwide during January, the opinion can only be confirmed that 2017 will be the year of uncertainty and instability. The better prices of the beginning of January for barrel, iron ore, coke, scrap, metals, nickel and other commodities are now more and more conditioned by several oncoming geopolitical events: the new USA President actions, the Brexit (within March the art. 50 declaration), the general election in France (April), in Germany (Autumn) and Italy (Sprig or Autumn), the G20 Meeting in Taormina (May, where a two speeds EU Community could be approved), the new Chinese paradigm now opened to the globalization, the conflicts in several different areas and the risk of ISIS/Daesh terrorist attacks, etc. It seems that the world will return back to the balance of the power where USA, Russia and China will drive the economies.

In Italy, January started with the request of strong price increases, mainly from some German suppliers as it happened in May 2016. High enough to astonish the Italian end-users: The market saw 35 – 45 € more than December prices for the new contracts. The domestic suppliers, used to work on a weekly spot market, started the deals asking for 15 – 25 € more of the last paid prices, with the aim to renew the increases during the month. After about ten days of complete mess, only few orders have been settled with the European suppliers in the range of +25 – 30 €, while the domestic suppliers settled their spot contracts up to +30 – 35 € against the December prices. During the last ten days of January the wind changed and the prices suddenly started to decline mainly on the domestic spot market up to 10 – 20 €. The main explanation for this fast change is the absence of the Turkish buyers from the market and the consequent stop of new orders, but also the fast sink of the USA export prices (less 60 – 70 $ in a couple of days). The arrivals at the Italian ports were abt 38 Kt for scrap, abt 98 Kt for pig iron and abt 63 Kt for HBI. At the end of the month the mills inventories were well covered.

Following the January indications of the average prices paid (€/pmt delivered):

New arisings E8:
Italy 246
France 259e
Germany 259

Shredded E40:
Italy 255
France 260e
Germany 260e

Demolition scrap:
Italy 231
France 241
Germany 241

For February other prices reduction are foreseen, in the range of 30 – 40 € depending on the scrap grade and its origin, going back to November/December prices. If the Turkish prices will grow further, also the European ones will follow, and the expected reductions will be lower than expected.

Regarding ILVA, the two companies involved in the ILVA business – AM Investco Italy (ArcelorMittal and Marcegaglia) and AcciaItalia (Arvedi, Delfin, Jundal and CDP the State controlled investment bank) – are still waiting for the final replies to the environmental plan presented to the three consultants nominated by the Environment Minister. After that they have to present the final business plan and the economic offers. Now the Government target is to close the business within June at the latest.

PIG IRON – H.B.I.

The HBI arrivals have been from the Black Sea and, for the first time, from Koper where Voest Alpine discharged very large vessels loaded in the new USA plant for re-loading small vessels to be allocated to the Med-area consumers (i.e.: Ilva Taranto). The inventories at the ports and mills have been well restored.

Source: Alocci Rappresentanze Industriali