Sentiment is improving in the Italian distribution sector, supported by fourth-quarter price recovery and improved margins, particularly for flat products and their derivatives, Kallanish notes.
The uncertainty surrounding CBAM and the new safeguard regime is paradoxically adding confidence, with distributors expecting further price gains as protectionist measures are implemented.
Some distributors’ purchasing behaviour has shifted since November, sources note. Distributors have returned to buying sizeable volumes to restock, encouraged by firmer flat steel and coil derivative prices, and by expectations of a continued uptrend in the first quarter next year.
By contrast, long products are seeing slower sales, especially in southern Italy where adverse weather has disrupted construction activity and deliveries. A major distributor notes that long products demand remains volatile due to weakness in the private construction sector, though this is being partly offset by strong infrastructure orders financed by the EU post-Covid recovery fund. “Margins have returned, and the end of the year will compensate for many months of low prices,” the owner comments.
Another large distributor reports securing significant volumes of longs and flats ahead of the December holiday period, procuring material before the latest round of price increases implemented by European mills. “The end of the year is saving us,” a third distributor says, confirming restocking is taking place in November and December in anticipation of future hikes and to prepare for next year.
Despite a 20% drop in volumes in 2025, the company’s revenue improved thanks to stronger Q4 pricing on plate, sheet and tube. The service centre traditionally purchases small, frequent lots, but has changed strategy amid the current price environment.
Service centres remain noticeably less upbeat than distributors. Exposure to CBAM surcharges and quota constraints will push up their procurement costs, forcing them to reconsider their sourcing strategies.
A purchasing group reports a sense of “anxiety” in the market as service centres struggle to quantify import costs and do not consumption improving. Tube prices are rising alongside sheet and strip, but increases remain slower and continue to lag behind coil gains.
Natalia Capra France
