Demand could improve in the coming weeks, driven by the recent uptick in coil prices, despite the expectation that consumption will not recover until early 2025, Italian trade association Assofermet says in a market note seen by Kallanish.
The market may have been shaken in the early days of October when ArcelorMittal announced a sharp increase in the price of coils. Although it is still too soon to predict a response, the cautiously optimistic stimulus announcement from the Chinese government indicates that the long-awaited price increases may not be far off, the association believes.
However, the note says that “the persistent weakness in demand is leading to challenges for service centres, which are struggling to manage volumes that are considerably below their production capacity.”
It continues that the significant import pressure experienced in recent months in Europe from steel producers in the Far East has been mitigated by the stringent restrictions of the safeguard quotas and a new anti-dumping investigation.
“Indeed, numerous [import] negotiations remained unresolved primarily due to concerns over the potential obligation to pay costly duties,” it adds.
Distributors and service centres report price stability for long products and all coil derivatives.
October started amid the heightened tensions of the conflict in the Middle East, coupled with concerning projections from major European automotive manufacturers, including Volkswagen group and Stellantis.
These developments suggest “a less than favourable outlook for our sector in the immediate future,” Assofermet says.
The prevailing sentiment of uncertainty, absence of a long-term strategy, and a wait-and-see attitude are likely to persist in the upcoming quarter, the association forecasts.
Earlier this month, Assofermet expressed concern regarding potential EU anti-dumping duties on hot rolled coil from Japan, Vietnam, Egypt and India, which could result in a material shortage on the domestic market.
Paolo Sangoi, president of Assofermet’s distribution segment, told Kallanish in a previous interview that a shortage may occur, potentially resembling the events of 2021 and 2022, if demand increases and consumption improves.
Natalia Capra France
