Assofermet, the association representing Italian distributors of scrap, has issued a press release regarding the outcome of a conference held in Milan on November 23 with representatives of service centers and stainless steel traders in Italy.
After the meeting, what came to light is that Italian service centers are facing a strong reduction in their margins, that has worsened in the last 45 days. Demand is also diminishing, whereas on the other hand mills keep pushing for price hikes. In this scenario, with inventories in Italy still high, though declining, and given rising operational costs, margins have become thinner and thinner.
Moreover, the uncertainty as regards the current market situation prevents steel users from planning future purchases, and inflation makes the situation worse, increasing the users’ cautiousness both in terms of stainless steel consumption and investments.
Gianclaudio Torlizzi, founder of T-Commodity and an expert in raw materials, commented, “A deep understanding of the themes influencing geopolitics and the international situation is fundamental for service centers and steel traders, too”, adding that this is the reason why associations like Assofermet are crucial when asked to stand for the interests of product segments, especially in a moment of strong changes.
Another issue that emerged during the meeting was sustainability. According to Torlizzi, the decisions that countries have made to boost decarbonization will lead to the creation of two different markets: a high-quality market, where products will only come from sustainable processes, and a consumer market, with lower prices and less attention to sustainability, as “the times are not ripe to impose green standards consistently in all contexts”, Torlizzi noted.