Mr Pasini, it is clear that this is a period of crisis for the steel industry. We have seen a transition from an euphoric 2007 to a deep structural crisis in 2009 . Consumers are not eager to buy, limiting their purchases to just small quantities which will tide them over short periods. Do you think that we can speak about an obstacle which is blocking imports?
Unfortunately yes. This obstacle exists and is created by prices. It is sufficient to give some recent data: from January 2008 to January 2009 a negative trend was registered for imports into Italy; minus 56.8 percent for flat products and and minus 44 percent for semi-finished. National exports, a real vocation of the Italian companies, dropped by 50-60 percent. This is a period of crisis, and it is normal to see a reduction of prices aimed at encouraging demand. However, I'm convinced that the decrease in prices is coming to a conclusion
You mean that prices cannot decrease further?
Let's be careful. We have always to consider that we are in a period of continuing crisis but with prices now at a standstill. I'm convinced that it is not possible now to descend below a certain price threshold.
According to March 12 price reports from SteelOrbis on the local Italian rebar market, rebar was given in a price range of€90-100/mt. Do you think this is the bottom price?
I do not like to speak about price levels, but it is true that the quotations reported are based on European levels. I repeat, it is a totally personal viewpoint, but I feel that the price decrease is over.
Returning to imports-exports, are you worried about dumping operations from countries like China?
The risk is real, especially now. I don't like the "Buy American" proposal launched in the US because it is against the natural market rules.
In the long product export markets, in your opinion, which are the most active consumers now?
For the time being only North Africa is maintaining its levels of demand
And the UAE?
No. They are also starting to feel the crisis.
Is there any risk of price drops in the "still good" areas?
Unfortunately there have already been price drops. This is an inevitable consequence of the stance of almost all producers towards the markets where demand levels have been maintained.
Are Italian producers included among those to which you refer?
Unfortunately, yes. An example is the Algerian market, to which the Italian mills were selling until recently. Now the Turks and Spaniards have replaced them. But also in this market, I repeat, the price decrease is over.
Regarding the relationship between steel companies and the banks: what is the level of autonomy of the Italian companies during this period of crisis?
Mostly, it is the small companies that are suffering. Relations with the banks for these companies take place at junior level, not at director level. Do you understand? The problem for these companies is their low contractual power with the bank, contrary to the situation of the big companies. Thus, small firms play just a secondary role: they can only do what the banks allow them to do.
What will happen to the small companies?
The worst that can happen is that, given their weak structure, they could disappear from the geographical chart. This is a problem for the whole country, where such small-scale companies predominate. I recently visited Confindustria (main Italian employer organization) and spoke with their president Emma Marcegaglia. Her purpose, she stated, is to concentrate on the small-scale realities.
Is it possible to assist other mergers and acquisitions in this context?
We have to see how long the crisis lasts, whether it will come to an end in a month or in a year. Accordingly, we will have a better understanding. It is true that the mergers and acquisitions completed in recent years are now in a difficult situation.
In the last few days we heard about a possible new six-party joint venture long product company in Italy, proposed by Alfa Acciai. What is your opinion on this?
No comment.