Assofermet on Italian steel market: Lack of momentum in April amid global tensions, EU industrial slowdown
The Made in Steel trade fair lately held in Milan failed to deliver a turning point for carbon flat steel service centers, despite high expectations. Steel demand remains weak, further hampered by the April holidays. As highlighted in the monthly market report by Assofermet Acciai, the association representing Italian distributors of scrap, raw materials, and steel products. the market remains disoriented: European mills are cutting back production but maintaining rigid commercial positions, while competitive pressure is mounting from Asian producers, driven by weak domestic demand and export challenges to the United States. A new incident at blast furnace 1 of Acciaierie d’Italia has reignited concerns over the future of the Taranto site. In this context, Assofermet continues to monitor European regulatory developments, advocating for the interests of distributors and end-users.
Regarding stainless flat products, April ended with demand below expectations. Oversupply prevented any price recovery, while nickel volatility and a decline in stainless scrap further destabilized the market. Very short delivery times reflect a shallow order book, and negative first-quarter results among leading European producers reduce the margin for further price cuts. May begins with weak signals, in line with the broader slowdown in European industrial activity. The distribution sector remains under pressure, operating with zero or even negative margins. However, regulatory updates expected in the second half of the year, along with greater clarity on the CBAM mechanism, could offer a turning point.
As for warehouses, acording to Assofermet, April saw a rebound in both volumes and prices for flat products, bringing them back to average levels comparable to those of last year. It remains to be seen whether this reflects genuine demand or is merely a result of stock replenishment. Long products are also on an upward trend, albeit more moderately, while stainless steel continues to show a year-on-year decline. Although trade duty tensions appear to have eased somewhat, many uncertainties persist. “In addition, the fire at the former Ilva plant and the subsequent political statements have cast new doubts over employment and the production future of the Taranto site,” the report notes.
The tinplate sector is experiencing high tension due to new restrictions on imports from third countries. Customs clearance is becoming more complex as operators try to avoid duty payments, distorting the market and leading many to postpone purchasing decisions. With European prices having reached their ceiling, some import-focused traders have been forced to raise prices to recoup losses from the second quarter. A bright annealing line has also been shut down by a major European producer to improve production efficiency. Finally, according to the Italian association, the fire in Taranto is not expected to have a major impact on the tinplate market, given the now marginal role of Acciaierie d’Italia in this segment.
Romanian flats spot prices soften, sole local mill silent on restarting production
Following the weakening of the local currency, Romanian flat steel spot traders have decided to soften offers slightly compared to the previous week. Furthermore, with the second election day approaching this weekend, the majority of market players stated that the market is in a state of confusion, with demand being minimal throughout the week. On the other hand, Romania’s sole flat steel producer has decided to remain silent about the start of production operations. Financial difficulties and requirements for raw materials are reported to be preventing the producer from returning to business and beginning production soon.
In the local flat steel spot market, the majority of traders have decreased their hot rolled sheet (HRS) prices week on week by €10-15/mt to €715-735/mt ex-warehouse. Similarly, offers for cold rolled sheets (CRS) have fallen to €820-840/mt ex-warehouse, from €835-850/mt ex-warehouse last week.
Meanwhile, in the import market, HRS and CRS offers from Ukraine remain unchanged for delivery to Romania at €640/mt and €730/mt, respectively. According to the sources, Romanian customers have not shown much interest due to the upcoming election, and imports remain inactive. Similarly, HRC offers from Turkey have remained stable, with FOB prices of $540-565/mt and shipping costs of around €25/mt, arriving in Romania at roughly €505-530/mt CFR, unchanged from last week.
European longs market follows diverse price trends but moves towards stability
The European longs market registered different price trends this week, amid a general shortage of orders and a weak market mood, contrary to what would have been expected at the end of the Made in Steel event held in Milan on May 6-8.
The local rebar market in Italy reported a drop of about €20/mt compared to last week, with prices standing at €290-295/mt ex-works base (€555-560/mt ex-works including regular extras). “Made in Steel caused disorientation in the market more than once,” a source commented, adding, “The next few weeks will be complicated.” According to an Italian steel mill official, there is no room for a further drop in prices in the local market, and prices of finished products will follow the scrap price trend. If, as SteelOrbis has assumed, the scrap market in Italy were to rise towards the end of the month, it is likely that rebar prices would also recover.
In the meantime, however, end-users of long steel products are trying to take advantage of a stabilization in electricity prices and of the declines in the scrap market to lower their bids, and so the market seems to have found its balance for now.
As for wire rod, prices in the local market in Italy have varied slightly compared to the last levels recorded, but without showing any upheaval. Drawing quality has dropped from €635-650/mt delivered to €625-640/mt delivered, while mesh quality has increased slightly from €605-620/mt delivered to €610-625/mt delivered. “Following a lackluster quarter, Italian steel producers will try to support prices as much as possible,” a source said, noting, “The saturation of safeguard quotas could help with this.”
Continuing with wire rod, prices for drawing quality in central-eastern Europe have been reported at €645-660/mt delivered, whereas they have been reported at €625-640/mt delivered for mesh quality. In Germany, the same prices have been reported at €650-665/mt delivered and €615-630/mt delivered, respectively.
In Poland, as well as in the whole of central and eastern Europe, the drawing quality wire rod segment – linked to the automotive and mechanical sectors – marked a slowdown, whereas the mesh grade wire rod segment maintains a good performance, being linked to the construction sector.
Turning to exports, rebar prices from Greece have reported at €580/mt FOB, and wire rod prices at €570/mt FOB. These levels are unchanged from last week. As for rebar export prices from Spain, market sources reported that the levels stand at €560-570/mt FOB, down by €15-20/mt from the previous levels recorded by SteelOrbis.
In the import segment, prices of rebar and wire rod from Turkey stand at €515/mt and €525/mt CFR, respectively, up by about €5/mt compared to last week. Prices are calculated based on the European Central Bank’s exchange rate of $1 = €0.89 (May 15).
Italian service centres report demand improvement, import uncertainty
Italian coil service centre sources report stable consumption on-quarter in the second quarter, with signs appearing of a rebound following declining demand in the previous 12-18 months. There are however concerns over buyers’ ability to source material amid import restrictions.
One prominent company source has observed an increase in orders over the past three weeks from large purchasing groups, which are forecasting improved performance in Q2 and Q3.
Service centres’ Q1 sales volumes largely mirrored those of last year, which was already characterised by weakness, indicating that market tension and uncertainty persist. The primary concern remains weak margins, which are not sustainable in the long term.
“Given the disparity between sales prices and procurement costs, no operator in the market can effectively cover its expenses without resorting to speculative strategies based on purchases made in the past. Our business lacks a balanced structure in terms of its margins,” the source tells Kallanish.
Several members of the Assofermet distribution network told Kallanish at the Made in Steel event earlier this month they have seen their procurement costs soar over recent years and paid very high duties for imported material. Their limited ability to diversify their coil purchases across third countries and European markets put significant pressure on service centres’ margins.
“It is impossible to block imports. The EU may redirect them and change the geography on trade. In the present phase, EU producers will benefit, but in the medium term imports will come back reshaped,” a second source notes.
Distributors have only partly passed on the coil price increases. In 2025, the sector “will have to fight to repay their costs … Volumes are not helping us and we will have to play with our purchasing and selling timing, taking risks. End-users are giving some moderately positive signs, but these have to be confirmed over the next months,” the source adds.
A third service centre highlights the challenges confronting the manufacturing sector as it prepares for the upcoming implementation of the Carbon Border Adjustment Mechanism (CBAM), a complex tool currently under revision in Europe. There is a notable supply scarcity of specific dimensions and quality grades in Europe for the automotive sector.
“I am in the process of ordering a particular galvanised grade for the car sector and am working on issuing a quote to a key customer. The product is currently experiencing a shortage in Europe, with China being the sole supplier. However, the uncertainty surrounding CBAM raises concerns about potential additional costs. At this point, I am estimating the extra costs based on the available information, but I am anxious about the possibility of miscalculating these costs,” the service centre owner says.
The rise in protectionist measures and the CBAM uncertainty are factors that will have strong downstream implications. Due to elevated costs, service centres are concerned about future loss of customers, while certain component manufacturers within the automotive sector may ultimately resort to offshoring. “The number of errors and poor choices made in Europe on protectionism and green steel is unmatched anywhere else in the world,” the source concludes.
Natalia Capra France
7 Steel Nordic expands Danish rebar cut-and-bend site
7 Steel Denmark, part of 7 Steel Nordic, which has taken over the former Celsa operations in Scandinavia, has invested in an expansion of its Danish location in Ølstykke, 30km north of Copenhagen, Kallanish notes.
The site is mainly a cutting and bending operation; production covers the full range of reinforcement products and solutions, a spokesperson says. The company has now added a new plant building, which is equipped with both indoor and outdoor cranes, he adds.
New equipment includes a shear line with automatic bundling and labelling; a double bending machine with automatic setup; a logistics system for smarter planning and master bundle handling: and automated rebar storage with traceability module.
“The investment is a key step towards increasing our capacity, while also allowing us to install new, state-of-the-art equipment without disrupting ongoing operations,” the company says in a post on LinkedIn.
According to the spokesman, new equipment operation will start gradually, with full operation including full IT integration expected from September or October.
Christian Koehl Germany