The Bureau of International Recycling (BIR) warns that the Italian stainless steel market is facing a steep drop in production.
The country is dealing with a series of challenges, such as the steep increase in slab imports from Asian markets, and a significant reduction in finished products sales prices due to an influx of products from northern Europe. Another challenge is stainless steel mills’ continuous attempts to reduce scrap prices through the massive use of ferroalloys, which have become more competitive.
In the BIR’s latest quarterly report monitored by Kallanish, Ruggero Ricco from Italy-based Nichel Leghe says that the beginning of this year has been “…even worse than expected.” He adds: “No one could have imagined such a marked slowdown in the final quarter of last year, resulting in a complete halt to stainless steel scrap sales in December. In fact, the main Italian consumer of stainless steel scrap has totally stopped its purchases while the other players have drastically reduced them.”
The reasons behind this, he says, are lower quantities sold by mills as well as their desire to cut their significant inventories. In addition, there has been an increase in slab imports, thus reducing the need to melt scrap and ferro-alloys.
The sector is hoping for the first positive effects from the European Commission’s safeguard measures. Sources are pinning their hopes on these reviving consumption and production of stainless steel in Europe. That was, however, before the spread of the coronavirus.
The European stainless steel sector in Europe is going through a stagnation and low-price phase that was reflected in mills’ and distributors’ 2019 financial results. However, Kallanish earlier learned from sources in the industry that mills are now registering a surge in sales to the distribution sector after a major and long process of destocking.