Steel market losses unprecedented during the Ukraine crisis
In this period, the steel market continues to report dramatic losses.
The main falls are evident in the steel market, with unprecedented collapses in the steel and metal industries in our country.
Let’s take a look at how the crisis is unfolding.
The causes of losses in the steel market
We have already dealt with the steel crisis.
However, we have talked about it starting from the historical causes linked to Chinese expansionism, finally focusing on the recrudescence that matured in the Covid period.
The final blow was dealt by the Ukrainian crisis.
The consequences of the Ukrainian crisis on steel market losses
As we have seen, the consequences of the Russian invasion of Ukraine on the steel market relate to the availability of raw materials and semi-finished products.
In order to keep the steel industry going, our country relies mainly on exports from these countries, which are unfortunately at war.
The difficulties in finding them involve the sectors of industrial equipment production, household appliances, automotive and aeronautics.
But how is this crisis actually developing?
Russia and Ukraine: steel supplies halted
As far as Ukraine is concerned, the blockage of supplies stems from the closure of ports, with devastating consequences on the export of cast iron and steel slabs.
As for Russia, the difficulties concern the banking network: with the exclusion of Russian banks from the Swift circuit and irreparable cracks in companies’ letters of credit.
These events have an impact on the already very complex and precarious steel production in our country.
Exports in our country
To get an idea in numerical terms: Europe receives about 26.9 million tons of steel products from Russia, almost half (42%) of those coming from countries outside the European Union.
Of these products, Italy takes ¼ of Russian steel and about 47% of Ukrainian steel.
Accumulated difficulties
Adding to this some difficulties exist caused by energy prices.
As Fim Cisl announced, 80% of Italy’s steel production comes from electric furnaces that are constantly in operation in the working sectors.
This fact, added to the high price of raw materials and semi-finished products, risks dealing a terrible blow to the entire industrial production sector.
To get a concrete idea of the difficulties involved, one only has to think of the fact that the price of hot-rolled coils has been raised by Arcelor-Mittal from 180 euros/tonne to 1,150 euros/tonne.
Steel market losses in our country
Given the seriousness of the events, the consequences in our country have not been slow to make themselves felt.
Steelworks halted sales due to a lack of raw materials needed for production.
The most important losses
In a report, the CISL metalworkers’ federation estimated a slowdown in industrial production involving 26,000 workers.
The closure of the Ukrainian ports has mainly affected the steel production fabric of Friuli Venezia Giulia, which relied significantly on these exports.
The most important stoppages and slowdowns concern the ABS steelworks in Cargnacco (Danieli Group), Acciaierie Venete, Bertoli, San Giorgio Acciaierie.
The most used measures include the CIGO’s request of the counteract price increases and stop&go schemes modulated on the basis of energy costs.
Draghi’s measures
In addition to the measures introduced to combat energy prices, the Draghi government is developing strategies to supply the national steel sector.
The idea is to focus on alternative export sources.
It’s about Brazil, India and Turkey for steel imports and of Algeria and the United States for gas imports, especially after Russia’s blackmail over payments for gas pipeline supplies.
However, these are palliative measures which, as Giancarlo Torlizzi, general manager of T-commodity, reports, risk being ineffective without a plan that will allow our country to be energy independent and adequately protect Italian producers.
Pantalone’s fitting products
Given the latest disastrous events and the relentless price increases, at Pantalone we are moving forward by studying the market and continuously expanding our stock.
We have over 50,000 items in stock including flanges, fittings and pipes.
We invite you to take action by focusing on sourcing as much as possible nowadays.
Take a look at our catalogue to get an idea of what we can offer you.
Pantalone does not stand still and is committed at all times to the needs of its customers.
For more interesting facts about the industrial equipment sector, keep following our blog.
