Italian long products service centres and distributors report a quiet April following an improved March. Multiple companies tell Kallanish that downstream consumption remains limited amid deep concern over rapidly rising prices, cost inflation and cutomers’ financial difficulties.
Two purchasing groups report widespread payment delays with buyers unable to absorb current increases. Mill forecasts of demand improvement in the second quarter are not supported by any positive consumption signal or economic indicator. The Italian economy, which outperformed France and Germany last year, is now slowing, with depressed industrial production growth for several months.
“Customers buy day to day and only in small volumes. I tend to buy second-choice material, which can be of very high quality, and we have some work but not enough to be able to pay the €100/tonne ($117.62/t) plus increases producers are asking. Steelmakers have now become a powerful lobby and are so protected they will be the only ones able to make a profit this year with a disastrous effect downstream that will sooner or later backfire,” one service centre source comments.
Distributor prices are struggling to move higher despite what one purchasing group describes as “producers’ determination to keep the market tense”. The source notes this is not solely an Italian issue. Some of the lowest coil derivative prices in Europe have been recorded in Germany.
Since the close of the Tube and Wire trade show, German buyers have resumed some restocking activity, though not at increased prices. German values have also been impacted by high import volumes in the first quarter, particularly of tube from Turkey. However, the combination of the melt and pour regulation and new safeguard is expected to limit imports, which should push German tube prices higher.
Despite this support, Italian tube consumption remains in line with 2025 levels, the purchasing group source says. A member of the second purchasing group laments a complete lack of visibility in tube sales and difficulty passing increases on downstream.
One longs agent says he is confused by the succession of increases, noting no visibility and order sizes of between 30 and 90 tonnes, making it difficult to advise customers.
Several sources believe the current disconnect between the steelmaking and end-use manufacturing sectors will bring the market to a standstill within months, with the consequences only felt upstream after some lag.
One source adds a wider policy critique: “The key was not adopting Trump-style protectionism, as Europe is doing, to only protect one segment of the industry, producers, but stimulating demand. This strategy, however, is not in line with current and future European policies.”
