Genoa, Italy – The storm is over. Now there is the answer to the question faced several times during the last four months about the sustainability of the stronger and stronger metallic raw materials prices. The Chinese billets effect is over, the IMF and ECB economic forecasts are always not optimistic, in few weeks the Brexit referendum will show a result, Janet Yellen will raise the US interest rates, and several political polling are waited in the short future worldwide. In other words: The day-to-day problems are back, after a nice and fast dream. The last positive info is the Brent price now over the wall of 50 $, targeting 60 $, according to some analyst`s forecasts.
In Italy, May started with the request of strong prices increases, mainly from some German suppliers. So high to astonish the Italian end-users: 50/70 € more than the April prices for the May contracts. The domestic suppliers, used to work on a spot market, started the deals asking for 20/30 € more of the last paid prices, with the aim to renew the weekly increases during the month. After about then days of complete mess, with only few orders settled with the European and domestic suppliers, the wind changed and the prices (or better the required prices from the suppliers) suddenly started to decline and are still today underway. The main explanation for this fast change is the absence of the Turkish buyers from the market and the consequent stop of new orders. Looking at the below average prices paid by the Italian mills we can see that on the domestic market the increases has been around 30 € and around 50 € from France and Germany.
The arrivals at the Italian ports were abt 12 Kt for scrap, abt 160 Kt for pig iron and abt 53 Kt for HBI. At the end of the month the mills inventories remain at lower level. Following the May indications of the average prices paid (€/pmt delivered):
New arising E8:
Demolition scrap E3:
For June all the end users are asking for the same quotations paid during April. It seems possible if the Turkish buyers will remain few days more out of the market. Also the deterioration of the steel prices, mainly the rebars, is going in the same direction.
No news about ILVA. Two different groups of interested companies, one made by ArcelorMittal and Marcegaglia group, the other made by Erdemir, Delfin (family holding of Mr Del Vecchio – Luxottica) and Arvedi are competing for the business lease. It will be determinant also the final position of CDP (the State controlled investment bank Cassa Depositi e Prestiti). Anyway, the very complicated Ilva judicial situation is always in the hands of the Judiciary.
PIG IRON – H.B.I.
The HBI arrivals have been about 53 Kt, from the Black Sea and Libyan ports. Last HBI offers are reported around 270 $ pmt CIF Italy, following the negative scrap trend. The pig iron arrivals were very high, around 160 Kton, all from the Black Sea ports. The pig iron offers are now quoted below 290 $ pmt CIF for July shipment. The inventories at the ports and mills have been restored.
Source: Alocci Rappresentanze Industriali