April is a month of extreme caution, as Italian steel distributors and service centers await clearer signals of a change in customs policy before accepting medium-term orders, according to a recent market survey by the Italian trade association Assofermet, obtained by Kallanish.
Distribution operates in conditions of "purely commercial survival, when the number of orders is reduced to a minimum, and sales volumes are generally declining. Manufacturers and end users will continue to purchase only the materials necessary to fulfill orders that have already been completed," the message says.
"There will be no tendency to replenish stocks. Despite low consumption, distribution prices may remain relatively high or stable due to pressure from manufacturers, which may lead to lower distributor margins as costs rise," the report adds.
The greatest concerns are currently coming from outside the region.
The trade barriers and tariff policies introduced by the Trump administration are starting to have an impact on the real economy. Declining exports and fears of retaliatory measures from trade are forcing large manufacturing and automotive companies to freeze budgets, scale back projects and reduce orders for raw materials, which has a strong impact on distribution.
From the point of view of production, attempts are being made to consolidate growth. In the coming weeks, it will be important to understand whether the low level of secondary market consumption will force manufacturers to review their price lists, or whether the supply chain will be able to adjust to new price levels.
March ended amid renewed recession due to widespread fears and an atmosphere of deep uncertainty. As for warehouse activity, there is a decrease in volumes in the vast majority of segments. In the flat-rolled sector, sales volumes are partially declining.
Significant sales volumes of black rolled sheet could not compensate for the shortage noted in other products such as galvanized sheet and tinplate.
The same weakness is observed in the segment of long products. However, there are some exceptions that can mitigate the negative trend, such as beams and rebar products, for which Assofermet expects an increase in production volumes.
Author: Natalia Kapra
Kallanish.com
