Assofermet: Italian steel distribution under pressure as energy costs rise

The Italian steel distribution market remains under significant pressure, according to the latest market note from Assofermet Acciai. Weak demand, rising energy costs and geopolitical uncertainty continue to weigh on downstream activity.

The ongoing conflict in Iran is having a direct impact on the market environment. Higher fuel and energy prices are reducing end-user consumption while simultaneously increasing production and logistics costs, particularly for energy-intensive sectors such as steel.

Carbon steel: protected market, weak demand

In the carbon flat steel segment, EU trade measures — including CBAM, safeguard measures expected from July 2026 and existing anti-dumping duties — are acting as a strong barrier to imports. This is shifting demand toward European producers, who are better positioned to implement price increases despite weak underlying demand.

Service centers report a subdued order intake at the start of the second quarter, following a sharp decline in volumes during Q1. This has led to a “two-speed market”: while mills are pushing through price increases, distributors remain cautious but are expected to follow with a delay.

At the same time, supply constraints for certain grades typically sourced from imports are creating additional risks for availability.

Stainless steel: prices rising despite fragile outlook

In the stainless segment, demand in March was relatively stable compared to previous months, partly supported by anticipated price increases in Q2 driven by higher scrap and energy costs.

Overall, the market absorbed an initial price increase of around 10% in the first quarter. However, further price rises are expected in the coming months. The key question remains whether end-users will be able to absorb these increases without impacting competitiveness.

Distribution: low activity and high uncertainty

Across the broader distribution sector, March showed a renewed slowdown. Uncertainty and weak confidence are limiting activity, with most segments reporting declining volumes.

Flat steel products saw partial declines, while long products followed a similar trend, with only isolated increases driven by targeted or strategic purchases. Stainless steel also weakened, particularly in tubular products.

Buyers are currently limiting purchases to immediate needs, with no signs of restocking. This reflects a market operating under high uncertainty and reduced visibility.

External pressures intensify

According to Assofermet, external factors are adding to the strain. U.S. trade policies and tariff measures are beginning to impact global trade flows, leading to weaker exports and increased caution among industrial sectors such as automotive and manufacturing.

This is prompting companies to delay investments, reduce production activity and scale back raw material orders — further weakening demand for steel distribution.

Prices remain firm despite weak demand

Despite the slowdown in consumption, distribution prices are expected to remain relatively stable or elevated, supported by upstream cost pressures. This may result in margin compression for distributors as input costs rise faster than selling prices.

Tinplate: supply constraints push prices higher

In the tinplate segment, prices are rising across the European market due to higher input costs — including tin, hot-rolled coil, energy and transport — combined with tightening supply.

Import options remain limited due to CBAM, tariffs and safeguard measures, particularly affecting material from China. This strengthens the pricing power of European producers.

However, relatively high stock levels accumulated at the end of 2025 are partially offsetting immediate price increases. The pace at which these inventories are absorbed, together with demand developments, will be decisive in the coming weeks.

Outlook: cautious market environment

Looking ahead, the market is expected to remain highly cautious. Without a clear improvement in demand or easing of geopolitical tensions, the steel distribution sector is likely to remain under pressure, balancing rising costs against weak consumption and increasing uncertainty.