Italy’s distribution sector is reporting very weak demand over the past two weeks, following improved activity and order intake during January, sources tell Kallanish.
“Demand is at minimal levels,” one large distributor says. He expects tube and sheet prices to continue rising, supported by CBAM and other protectionist measures, but is more pessimistic about the sustainability of price increases in long products.
The source adds that the private residential construction sector has almost come to a standstill. Most customers, mainly construction companies, are currently active thanks to PNRR-funded infrastructure projects, but payments are often delayed or temporarily blocked, further slowing the market. The PNRR projects are financed through the EU’s post-pandemic recovery fund.
Other distributors in both northern and southern Italy confirm the ongoing uncertainty. They say the unsustainable price increases are prompting buyers to limit purchases strictly to immediate needs. Customers are buying small volumes and mixed grades of tube and long products.
“As distributors, this is a service we can provide, whereas producers typically require larger volumes of a single grade. That is why we still have some activity,” one company says, adding that overall demand has been close to zero over the past two weeks. The source also reports several cases of delayed payments and defaults, warning that liquidity in the market is beginning to tighten.
Another distributor agrees with this view, saying companies are being extremely cautious in managing customer credit risk, although the threat of payment defaults remains. Given the downstream situation, the source believes further price increases for long products are unlikely to be sustained, while demand for coil-derived products is also seen as unreliable.
In Italy, long steel producers are currently seeking price increases of around €20-30/tonne ($23.69-35.53/t) for wire rod, merchant bar, beams, rebar and mesh, depending on the product. Some prices have ticked up by around €10-15/t compared with early January, while others remain unchanged.
Italian merchant bar prices are reported at around €670-680/t ex-works, including size extras, slightly higher on-month. First-category section prices are flat month-on-month at around €735-740/t delivered. Rebar is assessed at €560–570/t ex-works, also showing a modest uptick, while drawing-quality wire rod remains unchanged from January at around €620/t delivered.
Meanwhile, some producers in northern Europe confirm they have temporarily halted sales in order to assess the impact of recent rises in energy and raw material costs before issuing new price lists.
Sections mills in northwestern Europe have seen some success with increases at the start of the year. One market observer tells Kallanish that mills sought increases of €30/t, but distributors cannot hand that down to their buyers. Buyers confirm this and see the increases limited to €20/t. Prices are around €750/t for category 1 sections (see Kallanish passim).
