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Market sources believed that prices would remain stable at least during the coming week, although there were risks in the market related to effects of the outbreak of 2019-nCoV coronavirus in northern Italy on prices and exchange rates.
Fastmarkets’ daily steel hot-rolled coil index, domestic, ex-works Northern Europe, was €484.52 ($539.97) per tonne on Thursday March 5, down by only €0.03 per tonne day on day from €484.55 per tonne on March 4.
The index was calculated based on deals and achievable prices heard in the range of €475-490 per tonne ex-works.
Some deals for smaller tonnages of material with higher extras for steel grades and other product parameters were reported at €500 per tonne ex-works.
Domestic prices have been supported by good order books at the Northern European steelmakers, where mills claimed to be trading for May-June shipments material. As a result, the producers felt no pressure to give discounts, market sources said.
In addition, there were no competitive import prices reported in the region.
Some market participants, however, believed that if lead times from domestic mill get longer the buyers might turn to imports.
The euro-dollar exchange rate could also support a recovery in demand for imported steel, market sources said. The euro has gained 2.46% against the dollar week-on-week, according to exchange rate service Oanda. It was trading at €1 to $1.114 on March 5, compared with €1 to $1.088 on February 27.
In the meantime, Italian steelmakers have been trading hot-rolled coil at €440-450 per tonne ex-works but looking for price rises to €460-470 per tonne ex-works.
Demand in Italy was expected to recover in the second half of March because domestic distributors have low stocks and will need to purchase substantial volumes in a couple of weeks’ time. This anticipated revival in demand was expected to support a domestic price rise, market sources said.
Meanwhile, the coronavirus outbreak has had only a minimal effect on steel production and deliveries in Italy as yet, but market sources were concerned that if the situation were to escalate it could result in disruptions to deliveries, so they were cautious about making new deals.
The AM InvestCo consortium, led by ArcelorMittal, signed an amended agreement with the commissioners for the operation of Italian flat steel producer Ilva on March 4.
“The core of the new industrial plan,” ArcelorMittal said, “is the construction of a [direct-reduced iron] facility to be funded and operated by third-party investors and an [electric-arc furnace] to be constructed by AM InvestCo.”