Italian steel service centers find themselves caught between producers and consumers in a market characterized by uncertainty, according to the steel trade association Assofermet. Despite insufficient margins, these centers continue to operate, facing challenges from the recent increase in quotes from EU and non-EU steelmakers, compounded by supply restrictions stemming from EU safeguard measures. Consequently, distributors and re-rollers are forced to increase their May prices.
April witnessed a slowdown in volumes sold, partly due to the numerous bank holidays observed in Italy and Central European countries. However, some positive signs emerged from end-users who increased their sheet and strip purchasing volumes, stockpiling for May in anticipation of a price rebound for coils.
Assofermet acknowledges that while the conflicts in Ukraine and the Middle East are bound to impact world economies, there are signs of optimism from the EU regarding the long-awaited round of lowering interest rates, expected to begin in June. The association notes that service centers' raw material stocks are slightly above average due to the slowdown in first-quarter sales.
After the April weakness in the downstream sector, Assofermet anticipates a price rebound shaping up in May for both flat and long products, with volumes in line with 2023. While the market no longer expects prices to decline, the association expresses doubts about whether the price increases will translate into a real recovery.
