In light of various European traders vision, the Italian steel trade association Assofermet anticipates a rise in coil sales volumes in the coming months. While EU steel producers currently grapple with elevated energy and raw material costs, they have initiated the first step for January deliveries and indicated an expectation of a subsequent increase.
The prevailing atmosphere of uncertainty, stemming from the contraction of steel sales volumes in the Italian market, persists alongside low profit margins. Weak demand from users compounds the challenges faced by EU steelmakers in implementing the desired coil price increases. The contraction in sales volumes has resulted in heightened stock levels, and orders from non-EU producers are decreasing as they adapt to this situation.
Despite the present weak demand for coils and derivatives, a gradual improvement is anticipated in the first quarter of the upcoming year. Trade centers remain deeply concerned about complying with the regulations of the Carbon Border Adjustment Mechanism (CBAM). Importers are required to furnish a complex set of data to authorities regarding the production process, a requirement that many non-EU steel mills are presently unable to meet.
As projected by Assofermet, the situation in November is poised to be complex, with new conflicts at Europe's doorstep escalating uncertainties, particularly concerning energy supplies that significantly impact steel product prices. Despite the weak demand for coil derivatives, it is suggested that prices have bottomed out. Consequently, distributors are now inclined to bolster their stocks in anticipation of a potential rebound.
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