The crisis that had hit stainless steel operators elsewhere in Europe seemed not to have touched our happy land. Now, unfortunately, Italy has become aligned with the general sad reality of recent months.
There has been major tension in the price negotiation phase, which in some cases has led to the total cancellation of orders - all because steel mills view a reduction in the price of scrap as their only means of competing with the low cost of the nickel pig iron used on a large scale by operators in the Far East. This has been met with strenuous resistance from scrap dealers seeking the minimal margins necessary for their survival.
The second quarter in Europe was characterised by low quantities treated and reduced sales, all this with the spectre of recession at the gates. In fact, the trade war on duties triggered a major drop-off in business investment because of the uncertainties and the fears in the market mainly surrounding the automotive sector, although there has been a slowdown elsewhere too. For this reason, the first sector to enter crisis was aluminium, followed by other metals such as iron and then finally stainless steel. These uncertainties had initially centred primarily on the northern European market but ultimately spread to Italy at the beginning of the third quarter. The early months of the year in Italy had brought consistency in both quantities ordered and sales conditions but, as mentioned above, the wider European problems have now arrived at Italy’s door too.
Only the recent growth in nickel prices has provided a small impetus - both in terms of volumes requested and actually exchanged - to a market that had appeared to be entering “summer break” mode.
Nichel Leghe Spa (ITA)