April is a month of extreme caution, with Italian steel distributors and service centres waiting for clearer signals on the evolution of customs policies before committing to medium-term orders, Italian trade association Assofermet says in its recent market note obtained by Kallanish.
Distribution is operating in a context of “pure commercial survival, with orders cut to the bone and an overall decline in sales volumes. Fabricators and end-users will continue to purchase only the material strictly necessary for orders already secured,” it says.
“There will be no tendency towards restocking. Despite weak consumption, distribution prices could remain relatively high or stable due to upstream pressure from producers, potentially squeezing distributors’ margins as costs rise,” it adds.
The greatest concerns are now coming from outside the region.
The trade barriers and tariff policies introduced by the Trump administration are beginning to show their impact on the real economy. Contracting exports and fears of trade retaliation are pushing major industrial processing and automotive sectors to freeze budgets, scale back projects and slow raw material orders, with a strong impact on distribution.
From a production standpoint, there are attempts to consolidate increases. It will be critical to understand in the coming weeks whether weak downstream consumption will force producers to revise their price lists, or whether the supply chain will manage to absorb these new price levels.
March closed on a note of renewed deceleration due to widespread concerns and a climate of deep uncertainty. Looking at warehouse activity, the vast majority of segments are recording a reduction in volumes. In the flat products sector, distributed volumes are showing partial declines.
The significant sales volumes of black coil sheet have been unable to offset shortfalls recorded in other products such as galvanised sheet and plate.
The long products segment is suffering from the same weakness. There are, however, some exceptions bucking the negative trend such as beams and reinforcing bar, for which Assofermet sees increases in stocked volumes.
