Concerns are growing in the flat service centre segment over the ability of European manufacturers to absorb the rising prices, Kallanish learns from a note by Italian trade association Assofermet.
Market conditions continue to be characterised by complexities and concerns surrounding CBAM, the new safeguard measures and increasing costs linked to the US-Iran conflict. Increasing costs and prices may lead to the gradual loss of competitiveness of the European manufacturing sector and the relocation of certain production facilities to third countries. This is due to the ongoing uncertainty and implementation challenges surrounding CBAM and other trade measures, the note warns.
The conflict in the Middle East is adding pressure to an environment that remains “complex and highly volatile”.
Moreover, the new safeguard measures will entail a significant reduction in available quotas and a sharp increase in duties on out-of-quota import volumes for coils, as well as the extension of anti-dumping duties on cold rolled coils from key exporting countries.
“The resulting regulatory framework, [which is] complex and particularly burdensome, is expected to lead to a structural increase in the cost of imported steel in Europe, while at the same time strengthening the position of EU producers in pursuing higher price levels,” the note states.
The past month was characterised by generally weak trading activity in the flats segment, in line with the trend already seen in January. Service centres showed limited interest in purchasing coils, while end-users restricted procurement to immediate needs. Regarding CBAM, the European Commission has indicated that, at this stage, default country values should be used as the basis for calculating costs, the note concludes.
