Bar prices in Western and Southern Europe remain stable compared to last month, while some manufacturers are now considering the possibility of increasing them amid rising production costs and scrap prices.
Some market participants in France, Spain, and Italy argue that increasing processing volumes is challenging because consumption in Europe remains limited. This situation is offset by more sustained demand from Eastern European countries.
A leading steel producer tells Callanish that although sales volumes in Europe remain average, profitability has declined significantly since the second half of 2023.
High energy prices, especially in Italy, along with the high cost of scrap continue to put pressure on profitability.
Meanwhile, the decline in sales has a negative impact on the European distribution sector, which is experiencing extremely low margins.
The financial performance of several large distributors in France and Italy, which previously relied on sales, has been significantly affected by the decline in long products, and rumors of payment delays are spreading.
European manufacturers benefited from the closure of the Ostrava plant, revealing a gap in the market that allowed them to regain market share previously held by the steelmaker.
Currently, France and Spain have the lowest prices in Europe, ranging from 240-260 euros per tonne with base delivery (263-285 dollars per tonne). In contrast, Italy has the highest prices: the base cost of delivery is 280-290 euros per ton, excluding additional medium-sized products priced at 420 euros per ton. Spanish manufacturers are represented in Italy, with a significant concentration in France.
Current conditions in the secondary market are hindering price increases, as lower consumption and narrow margins limit any price increases to only minor adjustments.
The tariffs imposed by the United States affect manufacturers only to a small extent, while the prevailing geopolitical uncertainty forces buyers to purchase limited shipments more often.
In Italy, distributors continue to purchase trucks that have already been pre-sold. In Italy, there was a period of replenishment in March against the background of a moderate increase in demand.
However, a source from among the manufacturers indicates that if distributors do not sell their past purchases, they will begin to reduce inventories, which will lead to lower demand this month.
The countries of Eastern Europe are actively supporting demand and improving
