Assofermet: Italian steel market’s weak recovery in March disrupted by tariffs
March and the first days of April were characterized by strong uncertainty in the Italian steel market due to the introduction of import tariffs by the US. This is what emerges from the monthly analysis of Assofermet Acciai, the steel division of Assofermet, the association representing Italian distributors of scrap, raw materials, and steel products.
Starting from flat products, Assofermet described an uptrend in March. The slight recovery of consumption, however, has been jeopardized by the possible outcome of a global trade war. Moreover, new EU safeguard policies – which hamper steel inflow into the territory – may divert import volumes, hence generating possible price increases. “Since they are dealing with low demand, we have yet to understand if finished steel users will be able to support such rises without losing competitiveness in the international market,” Assofermet stated. End-users’ sales volumes, in fact, are still suffering from the automotive and white goods crisis, and there are no signs of a possible recovery in the month of April.
In the stainless steel segment, both longs and flat products are experiencing low levels of demand. Offers, however, are still abundant and this keeps prices under pressure. Nonetheless, Assofermet reports weak signals of stabilization, which could suggest a gradual rebalance. The scenario is rather complicated, Assofermet concluded, but “it offers some ease for those who will be able to be resilient to the market’s evolutions”.
As for warehouses, March recorded a negative performance overall, with the exception of seamless pipes. Steel sheets, on the other hand, seem to be the most affected category. The prospects, unfortunately, are not bright: with the introduction of new tariffs by the United States, some sectors such as mechanics could decide to revise their investment plans by reducing the volumes purchased in the face of a foreseeable drop in turnover due to the reduction in exports.
Finally, in the tinplate segment, there was a recovery in demand in Europe due to the introduction of a 20 percent cap for each country in the “Other Countries” quota. “Some tin coating plants, which remained inactive throughout last year, are gradually returning to full operation,” Assofermet reported.
Assofermet sees slight recovery in March long volumes
There have been signs of recovery in the volumes of merchant bars products and sections in recent weeks due to new construction projects commencing in March with the start of favourable weather conditions, Italian trade association Assofermet says in a market note seen by Kallanish.
Conversely, last month flat products experienced a modest downturn in both volumes and pricing.
“We are witnessing a market downstream that, due to global geopolitical tensions, is struggling to recover,” the note states.
It adds that in February, the automotive, household appliance and construction sectors recorded a sharp slowdown. However, in March there were timid signs of recovery, fuelled by the interest of several companies in covering their flat needs for the coming months with scheduled supplies.
“We look with great interest at the strategic dialogue on steel recently promoted by the EU Commission and we hope to be able to give our contribution as representatives of the pre-processing and distribution sectors on the national territory. We really hope that attention will also be focused on the problems of EU manufacturing, because without orders from it the steel industry is also destined to collapse,” Assofermet warns.
“Effective countermeasures to the ongoing industrial delocalisation must be adopted as soon as possible, with measures to stimulate demand, while slowing down the unbridled rush to green production, extending deadlines and reviewing programmes,” it adds.
In a recently released position paper on US president Donald Trump’s enhanced protectionist policies the association warned that the trade war could potentially lead to significant market distortions for Europe. The execution of US policies is expected to lead to an redirection of global steel exports to the European Union, potentially prompting the bloc to consider countermeasures aimed at Asian countries.
Assofermet proposes rethinking the existing EU protection mechanism and extending it downstream. Currently, Europe is focusing its defensive strategies solely on safeguarding the upstream segment of the supply chain.
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Assofermet: EU should extend safeguards to downstream market
The trade war initiated by the Trump administration could potentially lead to significant market distortions for Europe, Italian steel trade association Assofermet states in its recently released position paper on US president Donald Trump’s enhanced protectionist policies.
The report obtained by Kallanish expresses concerns about the potential short, medium, and long-term effects of the US’s protectionist stance. The execution of US policies is expected to lead to an important redirection of global steel exports to the European Union, potentially prompting the EU to consider countermeasures aimed at Asian countries.
“A similar scenario, which already occurred in 2018, could have particularly serious consequences, since the delicate European economic balance is no longer able to sustain further [domestic] price increases, without risking a further and irreversible loss of competitiveness,” Assofermet warns.
“The part of the economy most at risk is therefore… the EU manufacturing industry that regularly uses steel… in its production. If we continue to protect only the upstream sector, triggering inflationary scenarios…we will continue to destroy the domestic EU market demand as well as exports of EU finished products,” it adds.
It proposes rethinking the existing protection mechanism and extending it downstream. Currently, Europe is focusing its defensive strategies solely on safeguarding the upstream segment of the supply chain.
The US ranks as the second largest export market for European steel producers, representing 16% of total steel exports in 2024. Europe primarily exports premium steel products to the United States that are not produced on the American soil, distinguished by very high costs and performance.
“Consequently, the application of import duties could be easily absorbed by the importer,” the paper suggests.
The ramifications of these tariffs on Europe may result in a notable reduction in EU exports to the US. This could subsequently diminish the demand for raw materials such as scrap and pig iron from mills that might face challenges in finding alternative export markets.
Production levels in the EU are anticipated to decline and the region may need to extend its safeguard measures and anti-dumping duties on imports from the US. The cessation of steel exports from non-EU countries to the US could result in a substantial influx of these materials into the EU, which may lead to considerable market distortions.
In reaction to the US tariffs, it is also plausible that some steel manufacturers in the EU will consider relocating their production operations to the United States.
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Assofermet: new US tariffs threaten EU Steel Industry and market stability
Italian steel trade association Assofermet has expressed concerns following US President Trump’s announcement to impose 25% tariffs on steel and aluminum imports as of March 12, 2025.
Assofermet emphasized that the US tariffs could seriously threaten the European Union (EU) steel industry. The US is the second largest export market for EU steel producers, accounting for 16% of total steel exports in 2024. However, the new tariffs could lead to a drop in production in the EU steel and aluminum sector and domestic demand may be insufficient to cover this gap.
The Association also pointed to the risk of shifting steel flows from Asian countries to the EU market. “Our main concern is the possible domino effect of the new tariffs against Asian countries,” Assofermet stated, adding that this could lead to an increase in prices and a decrease in the competitiveness of the European steel industry. On the other hand, some EU steel producers have already started direct production in the US to overcome the tariffs.
Assofermet mentioned the possibility of the US administration imposing reciprocal tariffs on countries that impose trade barriers against the US, which could further complicate trade relations between the EU and the US. This situation could also slow down the EU’s green transformation process. Industry representatives emphasized that the EU should keep domestic demand alive by taking more comprehensive measures instead of only protecting the production phase.
Industry representatives underlined that the EU should take more comprehensive measures to protect the domestic market. If the measures are aimed only at the production phase, production assets in Europe may be damaged due to high costs and competitiveness may be lost in the long run.
EU protectionism to weaken entire value chain
According to Italian flat steel processors, a turn on the screw on the current protectionist measures are likely to bolster European steelmakers’ price increases; however, this trend is unsustainable without a resurgence in downstream consumption, multiple sources tell Kallanish.
All eyes are on the implications of the recent European Steel Association (Eurofer) proposals submitted to the European Commission regarding the enhancement of safeguard and other protectionist measures.
“In addition to other demands, Eurofer is suggesting halving the safeguard quotas. If their requests are accepted, it would represent a significant setback for the European manufacturing sector,” states a representative from the Italian trade association Assofermet. “We are collaborating with the politicians representing us in Europe to ensure that EU officials take into account the potential impact on manufacturing. Steel consumers are likely to scale back their capacities as they will struggle to keep up with the accelerating price increases in Europe. A boomerang effect is likely to affect European producers if the EU complies with all of Eurofer’s requests. They may enjoy high prices in the future, but since this will destroy the manufacturing sector, orders will be reduced. This is what happens when only one area of the industry is protected.”
Assofermet is advocating for the European Commission to archive the existing safeguard measures and refrain from extending them beyond 31 December 2025. This is to avoid any overlap with the Carbon Border Adjustment Mechanism (CBAM), which could result in further cost increases for the EU steel processing sector (see separate article).
A large re-roller expects that Eurofer demands will be granted and is implementing price increases in line with hiking hot rolled coil prices.
A mid-size service centre also notes widespread apprehension that demands will be granted.
“This will lead to a significant decline in imports, resulting in a substantial loss of competitiveness for both service centres and our clients,” he comments.
Amidst the ongoing review of EU steel import safeguard measures, Eurofer has provided recommendations to the European Commission on making the measures more restrictive, according to Yuriy Rudyuk, partner at Van Bael & Bellis. Eurofer is proposing reducing tariff-rate quota volumes to reflect declining EU steel demand, raising the safeguard duty to 32-41%. It is capping quotas for other product categories at 15%, as was done from July for HRC and wire rod, Rudyuk indicates in a LinkedIn post.
The association has suggested removing the carry-over option and replacing residual quotas with country-specific ones. It also advocates halting new exemptions for developing countries in the final year of the measures (see Kallanish passim).
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Assofermet asks EU not to extend safeguard measures
Italian steel trade association Assofermet is advocating for the European Commission to archive the existing safeguard measures and refrain from extending them beyond 31 December 2025.
This is to avoid any overlap with the Carbon Border Adjustment Mechanism (CBAM), which could result in further cost increases for the EU steel processing sector.
In a statement obtained by Kallanish, the association indicates that any modifications to the safeguard system should ensure that the current level of import liberalisation remains intact.
The EC should eliminate the country-specific quotas and replace them with a singular global share for each product category. To optimise the utilisation of quotas, Assofermet also recommends the implementation of a more flexible management system that permits the redistribution of unused quotas between nations at the conclusion of each quarter.
The prospect for extending or intensifying safeguard measures on imports fails to address the structural issues present in the European steel market. The ongoing lack in demand from end-user sectors cannot be resolved by additional import restrictions, the statement argues and adds that it is essential to encourage demand growth through broad economic policies, rather than relying solely on trade defence measures.
The EU steel processing sector has suffered as a result of the present safeguard in place since July 2018. The sector is facing significant challenges due to rising costs, restrictions on duty-free steel imports, and the influx of low-cost finished products from non-EU countries.
Any further safeguard revisions would introduce additional uncertainties into the entire system and supply chain.
In accordance with current EU legislation and World Trade Organisation regulations, Assofermet proposes that the safeguard legislative framework be restored to its original purpose and encourages the EC to prioritise structural solutions that boost demand and competitiveness within the European steel industry.
Last year the EC initiated an investigation to determine whether EU safeguard measures on steel imports need amending to reflect recent market developments, following a request by 13 Member States.
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Slow start to 2025 adds more uncertainty: Assofermet
January has reflected the market slackness that existed before the year-end production halts, Italian trade association Assofermet says in a market note seen by Kallanish.
In Asia, despite the weakness of the Chinese steel market, few production stoppages have happened, while India ended November with a 5.8% on-year production increase. These elevated production levels in Asia represent a significant area of concern for the global steel sector.
In response to higher production costs, European steelmakers have announced price hikes on finished longs and flats, even in the face of subdued demand, particularly from the white goods and automotive sectors. The recent coil increases are supported by the diminished interest in importing material from third countries, attributed to restrictive safeguards, anti-dumping, and anti-subsidy measures.
Market participants are closely monitoring the initial actions of the newly elected US president, Donald Trump, who has repeatedly indicated intentions to enhance customs barriers as a means of safeguarding the domestic market.
“The ghost of US tariffs promised by the next occupant of the White House significantly undermines the prospects for this first quarter… Furthermore, there is great interest in the future of Acciaierie d’Italia for which the appointed Commissioners have received purchase proposals from foreign groups and national consortiums in recent days,” the note states.
In 2024 flat products experienced the most substantial declines in volume, whereas long products observed a more pronounced decrease in average pricing. Uncertainty continues to loom over Europe, especially concerning the outlook for significant economies such as France and Germany, Assofermet concludes.
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Assofermet: downstream slowdown, pricing pressure Italian service centres
Reduced sales volumes and high costs continue to plague the Italian service centre and distribution sector, which is wedged between steelmakers and end users, Italian trade association Assofermet says in a market note seen by Kallanish.
In response to the upstream price increases for coils, service centres are now being compelled to raise prices of coil derivatives and pass the hiked costs on downstream. Firms are aiming to enhance financial positions and secure margins for the conclusion of the year.
The prevailing sentiment for December is one of a wait-and-see attitude. “November saw the consolidation of rising [hot rolled coil] quotes from EU steel mills despite much weakened demand from the downstream market, which still does not seem to be waking up. It is precisely this decoupling between the upstream production sector and downstream consumption which both confuses and worries all operators,” the note states.
Steelmakers are under pressure to enhance their financial performance, and the production cuts announced for 2025 are a response to persistently pressured margins. Assofermet is observing a stagnation in demand from various end users, which is preventing any new growth in prices and volumes.
EU producers, however, are rigidly insisting on increasing prices, driven by a reduction in available import quotas alongside anti-dumping duties, which make purchasing from the import market uncompetitive.
In November, distributors experienced a notable decline in volumes, accompanied by reductions in margins and turnover, primarily driven by persistent price weakness.
Assofermet recently launched a new calculation platform enabling coil buyers to assess potential anti-dumping and anti-subsidy duties as part of European Commission investigations. The initiative aims to support members’ understanding of the EU regulations regarding anti-dumping investigations. The calculator assists in evaluating the potential timing and imposition of duties.
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Federacciai at SteelOrbis Italy Forum: decarbonization risks becoming deindustrialization
Speaking at the SteelOrbis Italy Forum 2024 being held in Milan on October 8, Antonio Gozzi, president of Federacciai, the Italian federation representing steel companies, began his speech highlighting the critical issues that the Italian and European steel industries are facing, pointing out that, since the steel industry is a cyclical sector, the slowing demand – caused by several factors including geopolitical uncertainties and rising interest rates – has brought about oversupply.
These two issues are also affecting the decarbonization issue in the European steel industry, Gozzi commented. Disagreeing with the earlier statements made by Paolo Sangoi, president of the steel section of Assofermet, Gozzi said, “I think we all have to work for climate change, but the way the green deal is being applied to Europe deserves further analysis. In particular, the measures that have been taken did not consider impact analysis and cost-benefit analysis. In this way, decarbonization risks becoming deindustrialization, and that would be a débacle for Europe.”
This is because the closure of integrated steel mills will lead, according to Gozzi, to the interruption of the production of a particular type of flat steel that is essential to the automotive industry, which cannot be manufactured through EAF technology. This forces the suffering European automotive sector to import this product from outside Europe, mainly from Asia, Japan, China and South Korea, i.e., from competing countries in the automobile sector.
According to Gozzi, there will be no major investments in European steelmaking from a structural point of view in the next five to 10 years, because steelmaking is a long-term looking industry, and for now it is hard to make predictions. A key issue, however, is definitely the scrap industry, because as decarbonization of steel production is a global issue, there is a shift of production from electric furnaces from 25 percent to 43 percent around 2030, which will make scrap even a more strategic and critical material.
More than 60 countries have already taken measures to curb exports, and that is why Federacciai is calling for it to become a critical raw material which needs to be protected.
Another issue is that domestic scrap in Italy is more expensive than imported scrap, and one wonders how these many electric furnaces will be fueled. The way seems to be DRI, but the issue is controversial in Europe, as it requires particularly large investments. The plant investment must be accompanied by an investment in carbon capture technologies, because DRI is not neutral, even if it halves the blast furnace’s carbon footprint. Added to this is the cost of gas, which is the main power source for DRI.
Gozzi said he believes instead that as of today the priority is to concentrate all resources in the recovery of Taranto, so that it can return to being a plant that produces at least 6 to 7 million tons, which is the breakeven point.
The last topic addressed by Gozzi was trade policies. He said he believes that Europe made a mistake in not joining the US proposal for free trade through NAFTA (North American Free Trade Agreement), thus closing off a possible profitable market for exports.
Assofermet at SteelOrbis Italy Forum: collaboration across the supply chain is key to decarbonization
SteelOrbis has come back to Italy after seven years with SteelOrbis Italy Forum 2024, attracting almost 200 participants. The conference held in Milan on October 8 opened with an Italian steel market overview by Assofermet, the Italian association representing Italian distributors of scrap, raw materials and steel products.
“We are living through a particularly challenging historical moment,” declared Cinzia Vezzosi, president of Assofermet. The Green Deal, launched in 2019, has given a strong push to complex plans, setting ambitious goals with tight deadlines. In this ecological transition, recycled steel emerges, according to Vezzosi, as the most environmentally friendly raw material and a key component for the future of the steel industry. Recycled steel offers three fundamental advantages: it is eco-friendly, acts as an “iron carrier,” and is immediately available. Additionally, the spread of electric arc furnaces (EAFs) is a key factor in improving the circularity of steel production.
In this context, Italy holds a prominent position. “84 percent of Italian steel production comes from EAs, compared to 46.5 percent in the EU and 72 percent in the United States,” Vezzosi explained. This places Italy at the forefront in Europe and globally. A further increase in the demand for recycled steel is expected, and Vezzosi emphasized that this material is already available in significant quantities across Europe. “Increasing the demand for recycled steel would provide a great boost to the sector, making the entire supply chain more resilient.”
To fully take advantage of the availability of the material, technological advancements are necessary, both in industrial plants and machinery, which will also reduce quality waste and increase the availability of “old scrap”. However, regarding DRI (direct reduced iron), the president of Assofermet pointed out that it alone will not be able to meet global demand, although it can improve the quality of the final product. “Scrap will be needed to make up for the shortages in charge and iron content,” she affirmed.
The topic of transition and the current challenges were also addressed by Paolo Sangoi, president of Assofermet Acciai. Sangoi highlighted how the global economic landscape is impacted by the Chinese economic crisis, the inaccessibility of the Russian market, and conflicts in the Middle East and Ukraine. These factors act as a “drag” on economic recovery, worsened by rising costs and declining service quality in manufacturing. Major issues include commercial defense policies and the risk of excessive protectionism.
Sangoi emphasized the importance of imports to the Italian economy, but recent discussions on antidumping measures against countries such as Japan, Vietnam, South Korea, India, and Turkey, which are already subject to quotas, could trigger retaliatory actions and further difficulties for international trade.
In this uncertain context, the Italian manufacturing system is under increasing pressure, Sangoi said. The efforts required by the European Union to achieve carbon neutrality are substantial, and, while the Green Deal offers opportunities, it could place significant strain on strategic sectors, like automotive, which are already hit by global crises. The challenges that emerged in 2024 have fueled fears of a possible “collapse” of the Italian industrial system, with the risk that many companies might relocate to countries with less stringent regulations.
Sangoi concluded by expressing hope for an open and constructive dialogue among all associations and stakeholders in the steel supply chain, both nationally and across Europe, to ensure a sustainable energy transition while preserving the sector’s competitiveness.