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Italian CRC under pressure, mills fighting to keep prices up - 7 October 2011

Italian cold rolled producers are under pressure due to the lack of demand and the higher prices of the raw materials due to the strong dollar, Steel Business Briefing learns from market participants.

As previously reported, some northwest European CRC mills have cut prices for November and December rolling to €560/t. According to the main Italian producers and re-rollers they don’t intend to cut prices for December delivery.

“Spot prices are in a ‘delicate’ moment, it is true, with service centres in a wait-and-see position, but we are not going to cut prices, we are going to cut production”, Enrico Paladini, Marcegaglia’s commercial director tells SBB.

“If mills don’t have open positions they cut production not prices. Due to the strong dollar we are paying more our raw materials, but at the same time we are increasing our market share in the dollar regions”, he says.

It understood that the official Italian prices for domestic CRC are €580-590/t ex works, with new asking prices for December delivery at €600/t.

The Italian service centres contacted by SBB have confirmed that they are waiting to see how the market evolves and in particular currency trends. Some of them have confirmed that it is possible to find spot CRC in the market for €565-570/t but from Northwest European, not Italian mills, while Russian mills now due to the currency are not competing in Italy.

“Italian mills are trying to protect their price levels, but if the situation continues like this with some traders and European mills with materials I am sure that also Italian mills have to lower their prices to €570/t”, a distributor says to SBB.

 

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