High stocks and fierce competition are making it hard for Italian coil service centres to pass any part of their higher costs on to customers, according to a market note from Italian steel trade association Assofermet.
“This results in a further squeeze on margins, made worse by rising energy and ancillary costs,” the association says.
Downstream consumption showed no significant change in October. Manufacturing is still suffering from weak orders, with no concrete signs of a recovery in demand strong enough to support service centre activity. No major change in new orders is expected in November. Selling prices are generally expected to rise slightly, as service centres try to recover at least part of the gap with rising coil prices. However, weak demand will largely determine how far these increases go and whether they hold, Kallanish notes.
On the coil supply side, European mills have raised prices for fourth-quarter deliveries, helped by trade protections, and appear determined to build on this trend for the first quarter of 2027. This widens the gap between producers’ demands and the downstream market’s ability to absorb further increases.
Concerns over the future of the former Ilva remains high after the supreme court rejected the appeals against the Milan Court of Appeal order suspending production at Taranto’s hot end.
“The Italian consortium led by Federacciai would appear to be inclined to withdraw,” Assofermet says. A separate sale of the company’s assets looks increasingly likely, the association adds.
Meanwhile, Italian steelmaker Arvedi and Jindal Steel International have submitted their own binding offers to acquire the former Ilva plants, the special commissioners have announced (see separate article).
For service centres, the permanent closure of Italy’s only integrated steel producer is fuelling fears over coils availability and supply balance, at a time when import restrictions are already increasing.
The market is sending mixed signals for distributors. Hot rolled coil prices are consolidating in Europe, supported by lower availability and falling imports.
However, demand from end-users such as the automotive, construction and household appliance sectors is still not strong enough to drive a lasting cycle of price increases. In October, distributors’ sales prices held up and was slightly above the same month of 2025, while volumes fell. Overall, volumes fell by more than a quarter, while average prices rose in almost every segment.
“Reduced availability is supporting coils, but without a recovery in industrial demand the increase is struggling to consolidate. For distributors, the priority remains the selective management of stocks in a context where value per tonne has improved, but volumes are not yet showing convincing signs of a turnaround,” Assofermet concludes.
