Assofermet: Steel demand weakens in April, but fundamentals positive

After a positive first quarter triggered by a rebound in restocking, apparent steel demand has decreased in the month of April as the persistently high inflation has weighed on end-users’ access to credit lines, Paolo Sangoi, Assofermet’s president of steel products, said to S&P Global Commodity Insights on the sidelines of Made in Steel fair event in Milan.

“We noticed a decrease in volumes in April, but margins are still OK. Now we have to better understand the direction for May and June,” Sangoi said, underscoring how the latest positive data from the automotive sector gives a glimpse of hope.

According to Q1 Acea data, the EU car market saw a substantial increase in new car registrations, with almost 2.7 million units sold, marking a 17.9% increase from 2022.

“Although demand has become weaker than the beginning of the year and is still below compared to the same period of a year ago, fundamentals are not as bad as the second half of 2022 and I am overall positive,” Assofermet’s president, Riccardo Benso, echoed Sangoi on the sidelines of the conference.

Hot-rolled coil prices in Northwest Europe ranged from Eur685/mt to Eur855/mt during Q1, according to Platts, a part of S&P Global, down from a Eur922/mt to Eur1,390/mt range in Q1 2022. Platts assessed HRC in Northwest Europe climbed Eur5 on the day at Eur805/mt ex-works Ruhr May 9.

Benso said that the key topic in the steel industry is its green revolution.

“We need to stress that this is an epochal change for the whole industry and what we have to remember is that the change is across all the supply chain, so we really need to work together—steel producers and distributors,” he said, adding how government funds should be given also to end-users to sustain their path towards carbon neutral. “Government gave a lot of money to steelmakers that is the right thing to do but we need incentive them also toward the end of the supply chain,” he explained.

The need for incentives across the supply chain was also stressed by Fernando Espada, president of EUROMETAL, while speaking at the event, noting how demand for green steel has substantially increased.

Author Annalisa Villa