Market deadlock to last until year-end: Italian distribution

The Italian distribution sector is forecasting slow sales throughout the value chain to continue until the end of the year for long products and coil derivatives. Some restocking may happen towards December to accommodate year-end financials.

Companies tell Kallanish the second and third quarters have been weak in terms of sales volumes, with apparent demand at virtually zero. While real demand is still there, the strong September price increases announced by all producers on finished long and flat products have further slowed sales. Some sources believe price falls may trigger a demand resumption.

“We are going back to a normal level of demand, but we are all used to the huge sales volumes of last year caused by the post-pandemic rebound and producers do not want to lower their volumes and price expectations,” a distributor comments. Due to the market stagnation, some companies are beginning to delay payments as financial struggles are again resurfacing in the market.

Significant overcapacity is being reported for coil derivatives, such as welded tubes and sheets. Welded tube discounts are hovering at 20 points and sheet prices are also falling significantly. Some sellers remain aggressive on tube and sheet prices, with the aim of recovering volumes.

Increases for merchant bar did not stick and prices flattened at €670-690/t ($670-690) ex-works. Some sales, however, are happening for sections, for which steelmakers are quoting at €1,300/t ex-works for the first category including size extras. They are being challenged by imported material sold at €1,230-1,250/t delivered in Italy. Following the latest increases, many firms are importing cheaper rebar, wire rod and sections, sources suggest.

Natalia Capra France