Positive economic cycle to prolong for years: Marcegaglia

The expected reverse of steel pricing uptrend will not happen any time soon, Marcegaglia chief executive Antonio Marcegaglia said during a Siderweb webinar attended by Kallanish.

Despite the current rush to buy, “we do not manage to replenish our stocks as we would like to, because everybody around the world is in the same situation”, Marcegaglia commented. High raw material prices, together with the positive impact of unprecedented fiscal stimulus, will push the sector forward, he added.

He sees the current positive economic cycle as a beginning of an expansive phase that will last a few years. “We initially overestimated the impact of the pandemic on the industry and manufacturing sector,” Marcegaglia observed. “We saw the end of steelmaking, but in fact, we realised that an important part of the world such as Asia and China, in particular, had a positive performance [in 2020] and, overall, we’re seeing a rapid recovery… I believe that some of us in March have achieved figures that had never been achieved before.”

The strong recovery is not being driven by specific regions, such as India or China, but is global, the ceo said.

Marcegaglia believes safeguard duties may be suspended in July due to the serious coil shortages. As a decision from the European Union is needed to extend the measures, it is more probable that that decision is not made with the objective to let the duties terminate upon the expiry date. Even if measures lapse, Europe will not be invaded by coil imports as the supply-demand imbalance involves the entire world, Marcegaglia forecasts.

After mitigating the impact of the first wave of the pandemic in 2020, Marcegaglia SpA registered strong performance in the first quarter. The company saw a 7.5% year-on-year increase in steel shipments and a significant hike of 26.5% in turnover versus Q1 2020 to €1,460 billion ($1,736 billion).

Sales volumes in 2020 increased by 2.7% y-o-y mostly thanks to the integration from December 2019 of plate producer Palini and Bertoli that Marcegaglia bought from Evraz.

Marcegaglia also reiterated his interest to purchase stainless steel producer Acciai Speciali Terni based on industrial synergies between the two companies. Marcegaglia currently buys around 30% of its stainless coil requirement from AST.

Natalia Capra France