Italian service centres register 'unprecedented' demand

Posted on 13 October 2020

Italian service centres are experiencing an unprecedented surge in demand from the automotive sector and the appliances industry. Demand has been steadily increasing since August but the issue remains availability.

Kallanish learns from service centres that, despite hiking prices for Italian coils, spot buyers and customers who purchase on yearly contracts, such as large appliances makers, are increasing their orders. They are “…desperate to find material,” sources say. Coil import prices remain too high and lead times too long.

At the same time, European coil producers cannot guarantee a steady stream of supply, particularly in Italy where ArcelorMittal Italia is producing at minimum capacity and having issues with deliveries. Deliveries from ArcelorMittal facilities in Fos-sur-Mer, southern France, which traditionally supply Italian companies, are also unreliable. Many workers there are still laid off and the restart of blast furnace no.1 has been delayed again due to technical issues, Kallanish understands.

A large appliances maker is said to have registered its best third quarter in history. “Appliances makers have a huge backlog,” a service centre comments. “Our customers’ activity is booming, and they are asking for double the material compared to their normal orders. The delays in coil deliveries is causing a crisis in the entire value chain and sometimes you miss a chance because you have no material to sell.”

Demand is erratic and the automotive industry is also ordering high tonnages, he adds.

Italian hot rolled coil is currently pegged at €480-500/tonne ($567-591) base ex-works while cold rolled coil and hot-dipped galvanized are between €550-590/t base ex-works on average, sources confirm.

Source : Kallanish