Southern European hot rolled coils prices are forecast to remain under pressure until October. Italian hot rolled coils buyers are negotiating a price decrease for their September contracts of €20/tonne ($22/t) on July quotations. The situation is similar in Spain and it is due to lower import prices from third countries, market sources tell Kallanish. Northern European HRC is currently €30-€35/t higher than Southern European HRC due to a lower level of imports from third countries, sources suggest.

At the moment Italian material is sold to service centres in the range €330-350/t ($371-393/t) base ex-works. Spanish prices are in line with Italian. Larger buyers in Italy however, have obtained €320/t base ex-works. This and next week’s negotiations for large buyers may go a few Euros below the bar of €320/t, sources suggest.

Some Chinese offers of very low quality HRC are below €290/t cif Italy but higher quality material without chromium and boron is offered at €320-330/t cif Italy/Spain. Russian HRC is offered at €310-320/t cif Italy while Turkish mills will not go below the level of €350/t cif Southern European port. Indian HRC exports volumes into Southern Europe are currently very limited due to low prices, sources say.

Meanwhile Italian steel maker Ilva is increasing production to 15,000 tonnes/day and enhancing its sales volumes. Southern Europe may see a sudden price increase from producers into October, some sources interviewed by Kallanish believe.