Quarterly Report – April 2020

Italy was the first European country to be hit hard by COVID-19. The virus has had a huge impact on the whole economy and, since March 8, most manufacturing operations have been forced to remain closed, except for those relating to the supply of essentials such as food and medicines. These closures will remain in place until May 4.

Most of Italy’s stainless steel mills were forced to shut down along with all service centres; in effect, the stainless steel sector ground to a halt in February. This situation has allowed other European players to take advantage; in fact, the industry across the rest of Europe was comparatively only marginally affected. The Italian government differed in its approach by imposing closures on its stainless steel sector; indeed, the entire domestic stainless steel industry will only be able to resume production in May.

No contracts for the sale or purchase of stainless steel scrap were entered into in April. In these days of a partial reopening, March contract deliveries are being completed. This situation does not allow for any clarity regarding the near future, specifically with regard to the following issues: availability of scrap; scrap prices, which are struggling to improve despite growth in raw material prices, in particular Ni and Cr; consumption of stainless steel by the manufacturing industry; strong European competition, both for the stockpiling of scrap and for the sale of finished products by stainless steel mills; and lack of financial liquidity, which could lead to the closure of some companies.

Despite the above, we remain moderately confident of a partial recovery in May and the beginning of June, but a longer-term forecast is more difficult to make at present.

Ruggero Ricco - Ruggero Ricco (Italy)

Ruggero Ricco

Nichel Leghe Spa (ITA)

Quarterly Report – April 2020