Automotive sector remains volatile: Ori Martin

The steel sector that serves the automotive industry must be quick to react to OEMs’ requests to supply them, Roberto De Miranda, executive member of special long producer Ori Martin, said in a virtual Siderweb event covered April 5 by S&P Global Commodity Insights.

“Sometimes our customers don’t have their materials, like microchips, so they slow down their production, but when they have materials, they increase their steel demand, so we need to react quickly to their requests,” he explained.

De Miranda sees volatility in the automotive market at the moment and said the sector is recording as well a slowdown in apparent demand, with demand that is particularly on the low side for light vehicles, while trucks and yellow goods still have good momentum, he added.

De Miranda said that, due to the uncertainties stemming from Russia’s invasion of Ukraine, steel prices would try to find stability and would likely move sideways rather than sharply increase again.

Regarding long products, EU rebar prices surged, according to the weekly Platts benchmark, from Eur822.50/mt at the end of February to Eur1340/mt base ex-works on March 28, with sources saying prices are stabilizing. In flat products, prices of HRC ex-works Ruhr started falling from peaks of Eur1460/mt March 21 and then moved sideways closing on April 5 at Eur1392.50/mt.

“Raw material costs are constantly increasing,” de Miranda said. “We as steelmakers are forced to ask customers for increases even at a time when there is a general slowdown in the demand precisely because of higher costs.”

Ori Martin is working hard to keep its margins at a good level, he said, and it lost 5-6 points in its EBITDA in 2021 due to it mainly being exposed to the automotive sector.

The company will nevertheless continue to invest in the revamping of its Ospitaletto mill in Brescia province, northern Italy.

ORI Martin has two main sites, one in the city of Brescia and one in Ospitaletto. According to its website, over 80% of its special steels are used in the production of components within the automotive industry. The most common applications are cold-heading steels for screws, bolts and non-standard pieces, suspension springs, case-hardened and quenched-and-tempered pieces.

Other holdings include Trafiliti Martin, specializing in cold finishing for automotive applications; Meccanica Trafilati, specializing in the deep drilling of bars for automotive industry applications; Novacciai Martin, a special steel bar finisher; Siderugica Latina, a high carbon wire and prestressed concrete strand producer, and Tension Technology Martin, provider of post-tensioning systems and strand and bar anchors.

— Annalisa Villa