Commercial activity in the Italian steel distribution sector remained weak in February, continuing the trend already observed in January, according to the latest market note published by Italian trade association Assofermet Acciai.
Service centres reported limited interest in purchasing coils, while end-users restricted orders largely to immediate requirements amid a cautious market environment.
According to Assofermet, the market is also facing growing operational complexity linked to EU trade policies, particularly the Carbon Border Adjustment Mechanism (CBAM) and the upcoming revision of safeguard measures. During the current transition phase of CBAM, the European Commission requires the use of country-based default emissions values to calculate carbon costs — a method distributors say significantly increases the cost of imported steel.
Combined with tighter safeguard quotas and the extension of anti-dumping duties on cold-rolled coils from key exporting countries, the regulatory framework is expected to structurally increase the cost of imported steel in Europe, while strengthening the pricing power of EU producers.
However, the association warns that the key question is whether European manufacturing will be able to absorb higher steel costs without losing competitiveness. There is concern that rising regulatory costs and trade barriers could accelerate the relocation of certain production stages outside the EU.
Stainless prices rise on supply restrictions
In the stainless steel segment, February saw further increases in selling prices, mainly driven by supply constraints rather than stronger demand. Import restrictions have reduced the availability of material, pushing European coil prices roughly 10% higher since November 2025, according to the association.
At the same time, downstream demand remains weak due to geopolitical uncertainty, the fragile European economic environment and growing imports of semi-finished and finished products that are not yet covered by CBAM.
Distribution sector warns of deindustrialisation risks
Assofermet argues that the current regulatory environment risks discouraging industrial production by increasing upstream steel costs while allowing imports of finished products. The association says this dynamic could accelerate deindustrialisation in Europe and is raising concerns across the distribution sector.
While price recovery was expected after a period of market weakness, Assofermet stresses that sustainable growth ultimately depends on real steel demand rather than supply restrictions.
In February, warehouse activity showed mixed trends. Total volumes handled increased compared with the same period in 2025, but the overall value of sales declined slightly, reflecting cautious purchasing behaviour. Carbon flat products saw higher hot-rolled volumes, while stainless flat products recorded lower quantities and stainless tubular products declined in both volume and value.
The market outlook remains uncertain. Rising regulatory costs, geopolitical tensions — including the conflict involving Iran in the Middle East — and economic weakness in major European economies such as Germany and France continue to weigh on demand prospects.
According to Assofermet, the key issue for the coming months will be whether steel users can absorb higher costs or whether the market will enter another phase of delayed purchasing and reduced activity.