April witnessed an intriguing dynamic in the Italian and European steel industry, with mixed signals regarding volumes sold but with growing interest from buyers, as highlighted in the monthly market report by Assofermet Acciai, the association representing Italian distributors of scrap, raw materials, and steel products. Despite the slowdown in activities due to the holidays in Italy and central European countries, some end-users opted to prudently cover their sheet and strip needs for the coming months, driven by the rebound in coil purchase prices.
Service centers continued to operate under declared insufficient operational margins in a market marked by uncertainty. "Recent increases in purchase prices, confirmed by both EU and non-EU steel mills, coupled with import limits imposed by the EU safeguard measures, erga omnes tariffs, and the effects of the CBAM, are pushing distribution and pre-processing operators to change pace, following and strengthening the upward trend in their sales quotations already undertaken in this first 10 days of May," the association added.
Raw material stocks at service centers are slightly above average due to the sales slowdown in the first quarter, while the conflicts in Ukraine and the Middle East continue to cause concern.
Turning to the stainless steel sector, April saw an improvement in demand accompanied by limited supply, owing to strikes at two major European producers in Finland and Spain, as well as restricted imports. The strike at the Spanish producer has been ongoing for more than three months, while May began with reduced demand and new requests for price increases from producers.
"The EU Commission, following a nine-month investigation, has also just published the anti-evasion regulation regarding cold rolled imports from Taiwan, Turkey, and Vietnam, confirming the exemption of the main producers from these countries," explained Assofermet, adding that the decision has been welcomed and should better balance the market, ensuring import opportunities for producers.
In the warehouse segment, weakness in downstream markets persisted in April, with prices showing no signs of recovery despite hopes for a turnaround. However, the first days of May seem to have signaled a rebound, with volumes in line with 2023 and significant price increases for both flat and long products.
Finally, according to Assofermet's analysis, there has been a discreet increase in demand in the tinplate sector, with lead times at European steel mills extending up to 14 weeks and price increases indicating an anticipated bottoming out.
While the ECB appearing ready to cut official interest rates next month, the situation in Ukraine and the Middle East still creates uncertainty for the markets, which hope for greater stability to support the macroeconomic situation.