Iberian steel stockists expect prices to remain elevated amid ongoing market uncertainty

Spanish and Portuguese steel distributors expect steel prices to remain at elevated levels for the duration of 2023 amid ongoing economic uncertainty and high inflation.

Speaking at the EUROMETAL Steel Net Forum Iberia in Porto on March 17, a panel of executives from prominent steel distributors gave their thoughts on the challenges facing the industry going forward.

The war in Ukraine, the energy crisis, supply chain disruption and high inflation had contributed to sharp price variations seen throughout the course of 2022, said Paula Correia Dos Santos, chair of Portuguese steel stockist J. Soares Correia – Armazéns de Ferro.

She predicted that the current elevated market prices would persist for the near-term owing to higher costs and ongoing supply chain pressures.

In her opinion, Spanish and Portuguese steel distributors are too focused on maximizing sales rather than increasing efficiency across their business.

“The industry needs to think about cost reduction and strengthening gross margins while increasing awareness of the process services we provide,” she said.

She added that distributors should also improve their understanding of the price structure upstream.

“We should all be aware of upstream costs and ensure that our prices are sensitive to the market,” she added.

Manuel Nobre, who is president of the Portuguese steel association Acomerfer and CEO of Groupo FAF, said that steel distributors must improve their communication when it comes to the value they provide in terms of supporting the execution of projects.

He said that distributors should also improve the value of their service while being resistant to client pressure regarding prices.

“We must avoid analyzing everything at average prices,” he said.

He also said that distributors need to learn to better analyze the signals from the market in order to secure prices that reflect true value.

“Just focusing on margins and tonnage makes no sense,” he said.

— Euan Sadden