Most Italian long steel producers plan to stop production for summer maintenance in August, but some have changed their schedule this year and plan shorter stoppages due to demand recovering from the Covid-19-related lockdown in March-April, sources told Fastmarkets.
***Italian Long steel
Major steelmakers in Italy are expected to stop all operations during the second week of August for the usual summer maintenance.
Demand for long steel products in Italy was good in July with construction activity recovering from what sources called “the lockdown coma.”Consequently, some long steelmakers plan shorter maintenance stoppages this year.“We are at 80-90% of pre-pandemic levels,” one consumer said.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Southern Europe was at €۴۲۵-۴۳۵ ($۵۰۲-۵۱۳) per tonne on July 29, unmoved since July 8 when it moved up from €۴۲۰-۴۳۵ per tonne.
Italian rebar producers managed to achieve higher prices in early July on improving demand from construction sector, sources said.
Generally, long steelmakers in Italy will stop for about two weeks this summer, according to one distributor.
A mill source in the country said there is a strong desire to run the business after mills were closed for two months in April and May.
“Pittini’s Ferriere Nord [Ossopo, province of Udine] will not be stopping completely. They will work three day per week from August 10 till August 16,” a market source said.Alfa Acciai, Italy’s major rebar and wire rod producer, will be stopping production at its plants in Brescia and Catania (Sicilia) on August 8-25, other market sources told Fastmarkets.Feralpi Siderurgica, another big rebar and wire rod producer located in Lonato, province of Brescia (northern Italy) will be stopping operations on August 10-16.
Rebar producer Industrie Riunite Odolesi (IRO) in Odolo, province of Brescia will be stopping on August 10-25, according to other market sources.
But one Italian producer source said their shutdown will last three to four weeks. “Many people were talking about August being an opportunity to recover lost production but it’s not going to happen, demand is not [high] enough, what is lost is lost. It [the summer] is exactly the same as last year, the whole supply chain in August will shut down.”
“The days stated [above] indicate a complete closure of the company [including offices, gates, etc] but generally the stoppage of production might last longer,” a trading source noted.
***Other EU states
Most European countries appear to have followed Italy’s steps and taken their usual summer holidays, despite the pandemic earlier in the year, although market sources were split on whether the usual summer slowdown would go ahead, with one longs producer source reporting more trading than usual for this time of year.
“The last week of the month is more active than usual, so as of yet things haven’t slowed down. August is the normal seasonal slowdown, there are a few cases here and there of people continuing work but no one is at 100% capacity,” the European producer source said.”Some companies may have shorter shutdowns or no shutdowns this summer. In August the momentum is continuing, the order books are filling up,” he added.
One European market source said there will be no slowdown because the whole market needs to gain back what they lost due to the pandemic lockdowns and the summer period will be busy, while another said: “they will carry on working with reduced employees, a lot of companies which usually do close [for the summer] will earn some money somehow.” On the other hand, a second distributor source said: “Some mills will have their usual holiday period and some are closed because of a lack of demand.”And some European market sources noted the market was already quieter than in previous years.
“Mills will conduct their usual maintenance in August. It’s quieter than in recent years, I was expecting more business in the holidays due to the pause in activity during the height of the coronavirus pandemic. I thought production would restart and material would be needed,” a second trader said.
“The market is dead as a dodo, it is quieter than previous years. Demand is not there but stockholders did have a mad rush of orders a week ago,” a third distributor said.
***Flat steel producers
Italian flat steelmakers are planning regular or longer maintenances at their production sites because demand for flat steel has been recovering slower than the long steel segment, market sources said. This slower revival process was partially explained by decreased automotive production and demand, according to the sources.
The European Automotive Manufacturers Association (ACEA) has forecast a ۲۵% year-on-year fall in car sales in 2020 because of the Covid-19 pandemic.
Italian flat steel producer Arvedi has stopped steel melting until late August to allow it to replace its electric-arc furnace with a new one, sources told Fastmarkets.
Italy flat steel re-roller Marcegaglia will stop trading in the second week of August and will return to the market on the last week of the same month, according to market sources.And ArcelorMittal Italia closed its offices from August 3 until August 17, the company said. During these two weeks, the company will carry out scheduled maintenance at the hot and cold area of the Taranto plant. The maintenances will in particular involve the rail rolling mill, pickling line as well galvanizing lines No1 and 2.
ArcelorMittal’s Novi Ligure facility, focused on steel supplied to the automotive industry, will also stop operations for the same two weeks. ArcelorMittal Genova will stop galvanizing live No5 and pickling facilities for the same period.
A major Italian HRC trader said ArcelorMittal Italia’s activity had been at “a very low level” even before the scheduled maintenance, meaning any other production reduction during the traditionally slow month of August will have little impact on the market.
Fastmarkets’ weekly price assessment for steel hot-rolled coil, domestic, exw Southern Europe was unchanged over the week at €۳۹۰-۴۰۰ (۴۵۹-۴۷۱) per tonne on July 29, but was up from €۳۸۰-۴۰۰ per tonne at the start of July.The assessment reflected deals and “workable” prices heard in the market, while official offers have been heard at €۴۰۰-۴۱۰ per tonne ex-works.
***Other EU states
In Northern Europe, in the meantime, market participants complained about a lack of clear information on the time of production stoppages during August.The sources, however, expect most producers will significantly cut output and stop some equipment this month.“The mills are not disclosing their plans of maintenances or repairs during August. In fact, I am not even sure which mills have resumed operation after they were idled during lockdown,” a German distributor said.
European steelmakers stopped equipment at some mills during the Covid-19 lockdown in an attempt to balance supply with reduced demand.Market sources do not expect stoppages to last longer than usual and both buyers and sellers will return to the market in late August, following the traditional market cycle.
Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe was calculated at €۴۱۲٫۵۰ per tonne on Friday August 31, down by €۰٫۴۵ per tonne from €۴۱۲٫۹۵ per tonne on Thursday. Friday’s index was based on a deal heard at €۴۱۰-۴۱۵ per tonne and “workable” prices heard at €۴۱۰-۴۲۰ per tonne.Official offers of HRC from the region’s steelmakers were also heard at €۴۴۰-۴۵۰ per tonne, but buyers did not consider those prices workable. Offers at this level indicated that mills intended to increase their prices, market sources said.
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