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HRC production in Italy was an estimated 7.6 million tonnes in 2020, accounting for 11% of output in the European Union, according to Fastmarkets’ research team.
Domestic production in Italy is likely to increase due to ArcelorMittal Italia’s target of producing 5 million tonnes per year of HRC, up from 3.4 million tonnes in 2020.
Since the Italian HRC market has traditionally had a higher number of independent distributors and buyers than other parts of the EU, it accounts for a larger share of spot transactions.
Although the Italian market has typically been more exposed to the impact of import offers, buyers are increasingly likely to rely on domestic supply due to the toughening of anti-dumping measures on HRC imported from Turkey and Russia, as well as other existing trade measures limiting deliveries from overseas.
As a result, Fastmarkets believes that there is sufficient volume and market liquidity in the Italian market to support a daily price.
In addition, Fastmarkets is proposing to launch a weekly price assessment for Spain’s domestic HRC market.
Spain’s HRC production for 2020 is an estimated 3.1 million tonnes, or 5% of the EU total. Prices in the country are currently covered by Fastmarkets’ existing Southern Europe domestic assessment for HRC.
Launching a distinct Spanish HRC assessment will ensure that pricing data remains available for this important European market. It will bring the additional benefit of distinguishing prices and trends between Southern Europe’s two primary flat steel markets.
Fastmarkets intends to apply the historical pricing data of the steel hot-rolled coil domestic, exw Southern Europe assessment to the new domestic Italy HRC index, owing to the fact that Italian material accounts for more than three quarters of Southern European domestic HRC.
The proposed price specifications are as follows:
Index: Steel hot-rolled coil index domestic, exw Italy, €/tonne Quality: Grade s235jr, width 1,250-1,500mm, thickness 3-4mm. Standard extras for dimensions excluded Quantity: Minimum 28 tonnes Location: ex-works Italian mills Timing: Up to 6 weeks Unit: € per tonne Payment terms: Typical commercial practice in the HRC market. Transactions that are conducted on different payment or credit terms will be adjusted back to the base specifications, taking into account discounts and standard Publication: Daily, 4pm London time Notes: Only material offered to/traded within Italy, as defined above, will be considered
Assessment: Steel hot-rolled coil domestic, exw Spain, €/tonne Quality: Grade s235jr, width 1,250-1,500mm, thickness 3-4mm. Standard extras for dimensions excluded Quantity: Minimum 50 tonnes Location: ex-works Spanish mills Timing: Up to 6 weeks Unit: € per tonne Payment terms: Typical commercial practice in the HRC market. Transactions that are conducted on different payment or credit terms will be adjusted back to the base specifications, taking into account discounts and standard Publication: Wednesdays, 2-3pm London time Notes: Only material offered to/traded within Spain, as defined above, will be considered
The consultation period for these proposed changes will end one month from the date of this pricing notice, on Wednesday March 17.
Subject to market feedback, the last weekly EU domestic HRC € per tonne ex-works Southern Europe price assessment will be published on Wednesday March 17, followed by the first daily index for Italy on Thursday March 18, and the first weekly assessment for Spain on Wednesday March 24.
Fastmarkets’ index methodology screens outliers and applies a tonnage-weighted model, which will ensure that the Italian domestic HRC index becomes the most robust in the industry.
To provide feedback on these proposed prices or if you would like to provide price information by becoming a data submitter, contact Maria Tanatar by email at pricing@fastmarkets.com. Please add the subject heading “FAO: Maria Tanatar, re: Italy domestic HRC Index.”
To see all of Fastmarkets’ pricing methodology and specification documents, go to https://www.fastmarkets.com/about-us/methodology.