Geopolitical tensions, trade disputes and steel trade measures have disrupted formerly well consolidated supply channels, at the cost of stockholding distributors and service centres (SSCs), European distributors’ federation EUROMETAL says in a recent research paper.
The EU steel distribution sector has experienced a marked contraction, with business volumes decreasing from 77 million tonnes in 2021 to 62mt in 2023. The downturn was particularly pronounced in the Multi-Product & Proximity Steel Stockholding Distribution segment, which saw a reduction from 47mt in 2021 to 37mt in 2023. Service centres’ supply volume in 2023 was 25mt.
EUROMETAL assesses the overall European steel supply potential – what it calls the typical steel distribution product portfolio market – at 116mt in 2023. This compares with 117mt in the 2020 pandemic year, 138mt in 2021 and 121mt in 2022. However, of this total, nearly half is served by mills, with 54mt supplied from mills directly to end users in 2023.
The decline in recent years is attributed to a combination of factors, like the economic downturn, supply chain disruptions affecting production and consumption patterns, geopolitical tensions and trade disputes, EUROMETAL notes. However, “steel distribution remains a vital component of the supply chain, as it offers essential services such as stockholding, processing, and value-added solutions to customers,” the association affirms to Kallanish.
Looking at the typical product groups, EUROMETAL notes that service centres continue to be a major player, accounting for 44% or 21.9mt of strip product supplies to the general industry, automotive, and construction sectors. The end-user quarto plate market saw 3.8mt supplied by stockholders and SSCs, with 4.1mt sold directly by mills to end-user segments.
For long steel products, distributors maintain a dominant share of 75% (22.8mt) in supplying to end users, while direct mill sales to end users accounted for only 7.5mt. The market for tubular steel products, totalling 10.6mt in 2023, was equally supplied by EU steel distributors and direct mill sales, each accounting for 5.3mt.
Christian Koehl Germany
