EUROMETAL Vice-President participated in the 21st Forum of the Unió de Magatzemistes de Ferros de Catalunya i Balears
On Wednesday, 8 October, EUROMETAL Vice-President Fernando Espada took part in the opening panel of the 21st Forum of the Unió de Magatzemistes de Ferros de Catalunya i Balears, held at the Gran Hotel Rey Don Jaime in Castelldefels, Barcelona.
The opening session brought together leading voices from the Iberian steel distribution sector. Alongside Fernando Espada, the panel included Roberto González Portilla (EUROMETAL Board Member and representative of the Unión de Almacenistas de Hierros de España), Manuel Fernandes Nobre (AÇOMEFER, Portugal), and Josep Arimany Palau (President of the Unió de Magatzemistes de Ferros de Catalunya i Balears).
EUROMETAL values the ongoing collaboration with the Unió de Magatzemistes de Ferros de Catalunya i Balears, and continues to support regional and national federations in Iberia and across Europe to foster exchange, coordination, and common strategies for the steel distribution sector.
Fernando Espada highlights the threat of Steel Derivatives at UAHE Webinar
On 1 October, EUROMETAL Vice-President Fernando Espada participated as a keynote speaker in a webinar organized by the Unión de Almacenistas de Hierros de España (UAHE), as part of its ongoing “Perspectivas del Sector” online conference series.
In his presentation, Fernando Espada addressed the rising uncertainty facing the European steel sector, pointing to the urgent need to tackle the growing impact of imported steel derivatives.
He presented recent research conducted by EUROMETAL showing the increase of steel derivatives imports, creating serious risks of carbon leakage, unfair competition, and the erosion of Europe’s industrial base.
Espada stressed that trade policy must evolve to reflect the complexity of modern supply chains, where downstream products can circumvent existing trade defence instruments. The presentation echoed EUROMETAL’s broader call for measures such as extending CBAM and trade defence instruments (TDIs) to steel derivatives.
EUROMETAL thanks UAHE for the opportunity to contribute to this timely debate.
EUROMETAL 75th Anniversary: The evolving role of steel distribution
This article is part of a series on steel distribution association EUROMETAL’s 75th Anniversary conference 2-3 July, discussing challenges and opportunities for the sector from its policy background; trade protection; the Carbon Border Adjustment Mechanism; green steel; and the evolving role of European steel distribution.
An oft-neglected aspect of the industrial transition is the growing proximity between steel producers and end-consumers, and in some cases, a perceived isolation of the supply chain’s distributors.
Domenico Martino, Chief Operating Officer of Knauf Interfer, stated in his presentation that direct mill-to-consumer long-term supply contracts for green steel would “redefine distribution’s role,” describing distributors as somewhat hamstrung in their adaptability by the inability of financial institutions to “price-in the opportunities within our reach” when issuing business or credit ratings.
Flexibility is paramount as the steel industry undergoes a period of drastic change and volatility. Attendees at the EUROMETAL Anniversary described a reduced frequency in long-term contract periods; tightening from annual, half-yearly, or quarterly supply agreements to monthly, or purely hand-to-mouth spot market sales.
As described by Ulrich Becker from Becker Consult + Beteiligungs, sales dynamics for European distributors are becoming more volatile – the biggest factor harming distribution profitability. “Lot sizes are decreasing, but frequencies are increasing,” he said.
Becker advised that distributors should attempt to evolve by establishing unique positions in the supply-chain: “business models should be sharpened going forward.” Becker encouraged distributors to ask themselves “what is the value of the company in the wider market?”
A distributor’s size could then be either an advantage, or a disadvantage depending on the specifics of their value offerings across their product and processing lines. “Specialisation will become increasingly important,” Becker concluded.
Indeed, a major theme as the conference neared its conclusion was how distribution could best cope with the evolutions in the steel sector. Ex-President of EUROMETAL, Fernando Espada, lamented growing difficulties in getting customers to pay for distribution’s value-added services, especially given the abundance of market intelligence available to end-consumers and the encroachment of steelmakers into direct-to-consumer sales.
Becker, as well as other conference attendees, instead saw this transparency as an opportunity, giving an example from his consultations with steel end-users. Becker described one project with a large consumer that wanted to better understand how prices asked by distribution mapped to steelmaker and distributor margins – this was not framed as a threat to distributor profitability, but as an opportunity, with the consumer “more than happy” to pay for the distributor’s value-adds when communicated and explained transparently.
As such, Becker, supported by others such as DM Stahl’s Fix, recommended distribution move away from “the sourcing of steel” as its primary business model, focussing more on the specialised processing of material and embracing indexation to evidence the necessity of premiums for their value-added services.
Such an approach would seem to map well to wider economic and geopolitical trends, with demand set to grow in the sustainability, infrastructural, and defense sectors – compounded by increasing protectionism and regionality in worldwide markets and supply chains. While economists at the event – such as World Steel’s Director General, Edwin Besson – emphasised that the steel markets “are, and will remain, very open,” they did expect growing protectionism and regionality in the short-term through mechanisms like melt-and-pour clauses:
“Steel is becoming increasingly attractive around the world,” he said, “it’s moved on from being the child no one wants to talk about.”
As steel’s presence in the spotlight increases, distributors will continue to face a number of challenges, but as identified at EUROMETAL’s 75th anniversary, flexibility and agility could also afford them profitable opportunities.
Benjamin Steven Journalist, Steel
EUROMETAL: European steel distribution concerned about growing mills downstream intergration
European distributors and service centers operating in the flat steel segment are facing increasing pressure as integrated steelmakers expand their direct involvement in distribution, challenging the traditional supply chain and eroding the space for independent players. This was a central theme during a recent industry panel discussion held at the EUROMETAL 75th Anniversary Conference, attended by Metal Expert.
Participants expressed concern over the growing number of mills bypassing distribution partners and reaching out directly to end users, especially during periods of weak demand. “Mills supply half a truck of one product and half a truck of another directly to customers—something that was once the stockholder’s role,” commented Fernando Espada, managing director of Tata’s Layde Steel. This behavior, according to distributors, intensifies market volatility and undermines inventory management and profitability for independent players.
The discussion highlighted a broader systemic issue: a lack of stable rules of engagement between mills and service centers. “Distributors are being squeezed not between producers and users, but by the mills’ pricing practices and volume dumping at financial period ends,” noted Marcus Fix, managing director of DM-Stahl, adding that such practices severely impact margin visibility and long-term planning.
Panelists also compared the European and US distribution models. In the US, distribution and steelmaking are largely separated, with an estimated 85–90% of service centers independently owned. By contrast, in Europe around 30% of stockholding distribution—and slightly more than 50% of service center activity—is controlled by mills. Despite differences in structure, US players showed stronger financials, with EBITDA margins averaging 6.2% over 2016–2023, compared to 3.6% in the western Europe.
While there was no unified consensus on which model is preferable, many agreed that the European model leaves independent distributors more vulnerable, especially when mills aggressively pursue downstream sales. To address this, several speakers advocated for a shift in business strategy.
“The business model of distribution should be sharpened going forward and have a high specialization,” said Ulrich Becker, senior managing partner at Becker Consult + Beteiligungs.
According to conference participants, wide specialization exposes distributors to higher stock risks and price devaluation. Narrower specialization allows better alignment with end-user needs and improves the ability to charge for value-added services.
Another recurring point was the need to redefine pricing models to better reflect the true cost of services. Distributors called for more transparent pricing that separates material costs from services like cutting, logistics, and stockholding.
“What we see is that the successful companies are those who are able to show to the customer that they are providing the additional services and that has a cost. And customers have to pay for it,” Fernando Espada added.
The panel concluded that future success for European distributors lies in building value-driven, service-focused business models, rather than relying on scale or commodity flows. As market pressures intensify, those who can clearly articulate and monetize their role in the supply chain will be better positioned to survive.
Vlad Shementov
siderweb FORUM: prices at their lowest, cautious optimism for 2025
Steel prices are expected to have bottomed out and a turning point now seems close. Participants at the round table ‘Steel in Italy and the World’ held during the siderweb FORUM appeared to agree on this.
‘The steel market is cyclical by nature,’ said Yuryi Rizhenkov, CEO of the Ukrainian Metinvest Group. The current bearish trend in the sector is the longest in the last 20 years. This alone leads me to be cautiously optimistic for 2025. Of course there are many uncertainty factors, such as the war that unfortunately continues in Ukraine and the crisis in the Middle East. However, we also see that governments, such as the one in China just now, are taking steps to stimulate the economy,’ he says.
“We only hope that the effects of the latest stimulus packages from China will have a lasting effect,” remarked Fernando Espada, president of EUROMETAL, noting how, on the European side, we are instead looking closely at the ECB’s upcoming moves.
‘I believe that prices are near the bottom, because flat steel producers around the world are suffering right now,’ said Antonio Marcegaglia, president and CEO of Marcegaglia Steel. ‘Moreover, I do not see any possibility of significant reductions in raw material and labour costs given the inflation levels. We need higher prices both to cover these costs and to address investments in decarbonisation’.
Despite a weak economy and geopolitical tensions, Alessandro Brussi, chairman and CFO of Danieli, described demand for steel plants worldwide as good. “Demand for steel,” he said, “is still growing in some areas and part of this growth is due to the availability of raw materials and factors such as gas, as in North Africa. In some areas, such as Europe, demand is driven by decarbonisation and the efficient use of resources such as scrap, energy and electrodes; in others, such as India, it is driven by the need to increase tonnes produced. ”
We have an interesting pipeline of orders,’ concluded Bruschi. “The main obstacle is the need for capital, for funding, for contributions from different governments to drive technological change within the sector.”
Asked what are the main challenges facing the steel market, Marcegaglia replied that ‘structurally high costs are undermining the competitiveness of European players’ and that in order not to succumb it is necessary ‘to focus on innovation in materials, processes, performance; to remain very lean in terms of organisation, flexible in adapting production levels to fluctuations in demand, and to move more towards services and value creation’.
At the same time, both Marcegaglia and Espada stated that although protection from unfair and aggressive imports is desirable, raising walls too high risks becoming ‘a boomerang’. According to Espada, the latest EU trade measures ‘are only protecting one part of the supply chain. On the one hand it is difficult to import certain products, but on the other hand we allow the import of products with higher added value. I think the Commission should focus on initiatives to increase steel consumption. Doing so would defend the entire supply chain’.
The CBAM, the Border Carbon Adjustment Mechanism, is according to Marcegaglia ‘a good objective, but with wrong and badly applied instruments, it risks being not only ineffective but even dangerous’. The chairman and CEO of Marcegaglia Steel added that so far, in its transitional phase, the CBAM has been more “a burden from an administrative point of view”, but has not brought about much change; however, all steel players are preparing to move towards more sustainable resources and making investments to supply green steel. Marcegaglia said he hoped that the CBAM would undergo changes, but was not very optimistic about it.
Despite the EU safeguard, duties and ongoing anti-dumping investigations,Italy remains the largest importer of flat steel in Europe. This was one of the main reasons for Metinvest to evaluate Italy for its investment project in partnership with Danieli. A project that was initially intended to be for the rolling of semi-finished products from Ukraine but which, with the loss of Azovstal due to the war, became that of a full-fledged steel mill. ‘Building a domestic production of this type of product would make the Italian economy more resilient and stable,’ he said. Moreover, the project ‘aims to revitalise the area’. ‘I believe we will finalise the Programme Agreement within the next two months,’ he remarked. The Metinvest-Danieli steel plant in Piombino will use raw materials largely from Ukraine, as well as both European and imported scrap. In this regard, Ryzhenkov emphasised that ‘at European level, there will be a big increase in the availability of scrap in the coming years. In fact, the export of this raw material is expected to grow in the next five years. So there should not be a supply problem’.
On the subject of investments, Marcegaglia said that his group’s investments are mainly driven by cost efficiency and innovation and the need for value chain integration in production. These were the drivers behind the acquisitions of Outokumpu’s stainless steel long products division and Ascometal’s Fos-sur-Mer site.
Stefano Gennari
