Assofermet, the Italian steel distributors' association, has once again addressed the issue of the revision of sales prices communicated by local steelmaker Acciaierie d'Italia (ADI) to its customers on March 11. On that occasion, the company had informed customers of an immediate increase in list prices in relation not only to new orders but also to those in progress, already confirmed and contracted. The decision was motivated by the sharp increase in the price of energy, but had sparked protests from distributors who had spoken of "an attempt at unilateral renegotiation of contracts already stipulated."
In a press release released today, April 26, Assofermet announced that it has requested an urgent meeting with the management of ADI "in order to clarify the reasons that led the latter to take these initiatives which, as far as we can deduce, have the precise objective of making the impact of the increase in costs recorded in recent months fall on distribution and on the final customer." The association stated that it did not understand in particular "how it could have been decided to make the significant energy price increases fall only on a part of the supply chain, also given that energy prices in the BOF production process used in Taranto are largely mitigated thanks to the significant amount of self-produced energy that these plants can generate."
Assofermet added that in recent weeks another issue has emerged, i.e., "the suspension of deliveries of various orders regularly confirmed" by ADI. "At the present time, the motivation that induced ADI's top management to take this decision is not clear, and, moreover, the duration of the suspension in question is not known," the association specified. The risks of ADI's move are that "many players will not be able to absorb the price increases on contracts already concluded and, on the other hand, they will not be able to dispose of a lot of goods regularly purchased, with heavy repercussions on the downstream market."
All of this, concluded Assofermet, "is happening in an already particularly complex historical moment in which, due to the ongoing conflict, huge quantities of steel from Russia and Ukraine are no longer accessible, the very strong restrictions on imports from non-EU countries persist due to EU safeguard measures, and EU steel production is declining due to the rise in energy costs. This deadly mix of a lack of steel and inflationary pressure on prices threatens to dramatically undermine the stability of the entire European economic system," Assofermet concluded.