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Riva shutdown may spell boon for the Italian steel market

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Impasse on Riva shutdown by judicial decree prolongs with the verdict of appellant court expected by Friday. However the earlier judgment is unlikely to be overturned even though there might be some reconciliation in view build-up of immense political and social pressure.

It is expected that
1. Prices will be increased, as already done, by the other flat producers
2. Other EU competitors will enhance production to cover the holes left by Riva
3. Hiked production will lead to higher demand of scrap and a consequent price increase.
4. Consumers will be forced either to accept the increases dictated by local mills or buy from import.

In the short term, say beginning September Italian market will be bullish with price expected to be at least EUR 20 per tonne to EUR 30 per tonne higher from now.

The situation is exacerbated by the fact that also long products producers don't have any available stock. During last months they were tuning output in accordance with the demand and thus with significant production decreases.

All these factors will assist to "fireworks" in September.




Source - Steel Prices Europe

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