EU protectionism to impact Italian quality coil procurement
Increasing European import restrictions pose a risk to the availability of specific coil grades and sizes that are not widely manufactured in Europe, Riccardo Benso, chief executive of coil service centre Albasider, told Kallanish during the Made in Steel tradeshow in Milan last week.
Certain high-quality products in Europe are priced at a premium and face limited availability. There are concerns regarding the willingness and capability of European mills to provide specific dimensions and qualities to small to mid-sized buyers.
“The rules imposed from above do not align with the needs of our complicated economic system. I’m concerned about the potential detrimental impact on quality,” said Benso, who is also a former president of Italian steel trade association Assofermet. “We had been around the world to select [coils] from the best origins; we formed partnerships that will have to be rethought, and now we will have to spend a lot of time researching new origins.”
“It is not certain that all new origins will offer the quality that our customers demand and, therefore, in my opinion, there will be an issue linked to the offer of high-end products that could, in any case, generate some perplexity among customers, some issues for the European industrial system,” he continued. “If Europe wants to be competitive on global markets, knowing that it has higher costs, it must in any case offer a product that has added value.”
Benso anticipates a transitional period will be required to adapt to the emerging protectionist landscape; however, he asserts that the downstream supply chain will implement appropriate countermeasures and successfully maintain equivalent quality standards.
The European Commission is currently revising the Carbon Border Adjustment Mechanism (CBAM). However, there is a significant risk the new framework may overlook the implications for Europe’s downstream and manufacturing sectors.
“Europe is a strong exporter … We excel at creating outstanding products and selling them, even if they are slightly pricier than others. We have to preserve our extraordinary ability to offer our products in global markets … We must pay attention to competitiveness variables, so we must not design a tool, CBAM, that only protects the upstream supply chain,” Benso noted.
Assofermet’s engagement with Europe and other steelmakers in the supply chain has improved, with collaboration beneficial to all parties. At the same time, the international trade war and the danger of US President Donald Trump’s tariffs are gradually easing.
“I am convinced that for him [Trump], the game has only just begun, and he will use it to bring as many parties as possible to the negotiating table. He has a strong vision for his country. During his presidency, he intends to do everything possible to restore the United States’ position, including an industrial one. I believe he has significantly underestimated the time and challenges associated with industrial restructuring that are required in the long run, to reallocate specific production once it has been dismantled and transferred,” Benso said.
He expects the market to require a period to absorb the existing overcapacity. The service centre sector is notably well-stocked. The current market conditions indicate an oversupply primarily in commodity grades; however, mills are reporting extended lead times for quality products and specific dimensions.
Despite subdued interest from service centres in acquiring coils, there are indications of a modest uptick in demand. Although automotive production remains subdued, the industry saw some improvement in the first quarter as car sales rose. Car component makers slightly increased their orders in Q1.
Benso anticipates a rebound in consumption in the upcoming year, with indications of a potential return of downstream demand emerging around September or October, following the summer period.
Natalia Capra France
EU flats market shows caution at Made in Steel trade fair amid rising volatility
Uncertainty was the dominant theme at this year’s Made in Steel trade fair in Milan, Italy, as Europe’s flat steel market grappled with weak demand, volatile trade dynamics, and mounting regulatory complexity.
As the steel industry gathered in Milan May 6-8 for the trade fair, market participants shared largely bearish outlooks for the flat steel pricing trajectory and expectations for the continuation of poor near-term demand visibility.
Despite the recent trend of increased mill offers across Europe, many attendees noted that regulatory uncertainties and a lack of concrete activity have kept prices under pressure.
“The fair has been quite muted so far. Sentiment is generally negative,” a Southern European mill source said. “There’s a lot of uncertainty—quotas, tariffs, the situation with the US—all of it is complicating things.”
But some sources noted more positive signs.
A German stockholder expressed optimism that a ceasefire in the Russia-Ukraine conflict and increased infrastructure spending under the incoming German government could help lift demand. “We’re hopeful this will improve sentiment in the second half of the year,” the stockholder said.
Imports are under pressure
Although European import quotas have seen mixed allocation rates across hot-rolled coil, cold-rolled coil, and hot-dipped galvanized steel, sources at the fair offered mixed views on price viability and buyer receptiveness to the different origins.
Numerous sources cited an influx of Indonesian coils, with offers heard during the fair at Eur 570/mt CFR Italy. Whether the material was workable for the wider market or more suited for piping applications remained a key area of debate.
Discussing the feasibility of imports in general, and the reduced uptake of the quotas, one trader referred to an atmosphere of uncertainty, partially due to buyer hesitancy in the first quarter during the European Commission’s safeguard review, with the impact still being felt. Similarly, looking forward, he said, “Buyers booking imported material from Asia are trying to delay for a few weeks to see what domestic prices and end-consumers are doing.”
“But any material that is ordered now won’t arrive until after summer; nobody has any demand visibility that far out, and they don’t want to take the risk.”
Despite the South Korean import quota for HRC being exhausted during the fair, market reactions remained muted. Many recognized that domestic availability in Northern and Southern Europe remained strong.
“It is a buyers’ market,” said a second trader, who anticipated that domestic HRC offer levels will drop by Eur20-30 in the coming weeks.
“We would like to see higher prices, but there is not a lot of business, and a lot of competition at the moment [among] service centers,” a service center source said. “We are very curious where mill margins are, as they will struggle to drop prices.”
The same source also pointed toward short-term demand visibility as significantly affecting market confidence, reporting that some customers were asking for small, additional volumes at the last moment, limiting the ability to do forward planning.
CBAM uncertainty looms
The EU’s Carbon Border Adjust Mechanism continued to polarize the market, with many arguing there was a continued lack of clarity or transparency on the emissions reporting mechanism or the potential price impact it will have.
Several market participants anticipated a price increase, citing the additional administrative burden following a shift in preference for customs-cleared material versus CIF cargoes and metal from origins with lower default values. However, the absence of EU-declared benchmark/threshold emission values and a corresponding benchmark carbon level for each production pathway remain common criticisms.
More broadly, sources suggested that the legislation was adding an additional layer of uncertainty, with confusion over how CBAM can be hedged and how the additional cost burden was coming at a moment when the market was under considerable cost pressure across the supply chain.
Cautious outlook
While some fair attendees held out hope that Made in Steel would bring fresh momentum to the market, most agreed that visibility remained limited and pricing pressure was mounting, especially on the domestic side.
“We’ll reassess after the fair,” said a buyer. “But the market feels cautious. Unless something shifts, we may see prices heading down.”
Market participants pointed to persistent uncertainty around trade policy, muted demand, and regulatory developments as key themes shaping the outlook for flat steel in the coming weeks and months.
