In March, distributors and service centres’ orders and shipped volumes are seen declining compared to March 2023, Italian steel trade association Assofermet says in its market note sent to Kallanish. The association does not forecast further strong reductions in coil prices and says a rebound may be close.
Italian service centres and flats products distributors have been witnessing a strong demand contraction from end-users to which distributors reacted by granting price reductions. These were “judged in many cases to be excessive, as well as illogical,” the note says
The gap between European and imported prices of coils from the Far East has widened again. Asian coil producers are quoting prices that are close to those of October and November last year. However, due to the strong uncertainty driven by insufficient consumption, service centres are shunning offers coming from non-EU countries subject to safeguard quotas. Furthermore, the issue of attacks on Red Sea shipping is resolved in many cases by circumnavigating Africa, which adds costs and lengthens time of delivery.
Order books of European steel mills seem to have dwindled and many of them have been forced to revise prices downwards hoping to gain new orders despite high production costs. Apparent consumption has disappeared and customers’ orders continue to be for low quantities, Assofermet says and its highlights a shortage at some distributors’ warehouses caused by the slowdown in coil supply.
The association sees a deterioration of sales of coils derivatives including sheets and tubes. “The international political situation complicates the forecast of future prospects by generating a general wait-and-see attitude which, as has been reported several times, freezes investments… Uncertainty prevents strategic planning of inventories,” Assofermet concludes.
Natalia Capra France
