Genoa, Italy — The strength and the volatility of the commodity prices have presented a particular challenge in framing forecasts and projection during the Q1. A lot of factors driving commodity and energy prices are likely to be temporary and subjected to the several geopolitical events happening every day.
The lower steel demand in China shows the weakness of the metallic raw materials (i.e. iron ore less 20 percent versus the higher of February) and also the lower steel products sale prices, both on the Italian and export market. All this is influencing the Turkish customary export sale market, where the Chinese are fighting with lower prices and also the domestic sales. The consequence is that the Turkish mills have to reduce their raw materials purchasing prices, especially for scrap orders.
In Italy, March started with a new jump of the scrap prices. Starting from the last week of February till the second of March, the domestic spot prices rose of about 30€ or more for the high-grade scrap, suitable to be used instead of the basic pig iron. After hard deals sellers and buyers agreed the same increases, during mid-March, for the monthly contracts with the European suppliers. During the last week of the month some small price reductions have been made on the spot domestic market, said €5/10 on the highest one. The mills inventories remained a little bit shorter than usual.
The arrivals at the Italian ports showed kton 30 the scrap, kton 60 the BPI and kton 35 the HBI. Following the March indications of the average prices paid (€/pmt delivered):
New arising E8:
Demolition scrap E3:
In this particular situation, where the mills are happy for the increased sale prices and a better orders book, the forecast for the April prices are oriented to some small reductions at least 5€. It`s the time of a not written armistice between suppliers and buyers to stay on the market with a lot of calm.
Some words about ILVA. On the 7th April the Ilva Advisor will transmit to the three Ilva extraordinary Commissioners his evaluation of the two offers received by AcciaiItalia and Am Investco Italy. Within the end of April the Commissioners will transmit to the Government their final evaluations and comments, but some delays are foreseen. The target is always to close the business within June at the latest. Also the workers’ unions are asking to be involved in the next steps of the deal.
PIG IRON – H.B.I.
The HBI arrivals have been always from the Black Sea, Libya and Koper. Last HBI offers are reported below 300$ pmt CIF Italy. The pig iron arrivals were all from the Black Sea ports. The pig iron offers are now quoted in the range of $360/390 pmt CIF for May shipment, also from Iran and India. The inventories at ports and mills are lower than the previous months.
Source: Alocci Rappresentanze Industriali