Spanish steel distributor representatives have expressed moderate optimism about the growth of steel consumption. They see short-term growth dependent on factors such as inflationary control, economic growth and the recovery of construction and infrastructure sector demand.
The uncertainty in the automotive sector's transition towards electrification, as well as high prices of inputs and electricity continue to worry distributors, delegates told Kallanish on the sidelines of the Eurometal Steel Net Forum Iberia in Porto last week.
"We see a recovery in the sector, despite challenges resulting from the conflict in Ukraine and supply disruption,” one participant commented. “There was strong demand for material at the end of last year, both from construction companies and individuals preparing to restart projects, but higher prices in the last months are once again limiting purchases.”
However, according to another Spanish steel distributor, current levels may already have become a "new normal”. "At the end of our chain we find the conditions of the large steel companies. If they say they have high production costs and raise their prices, we must accept this, lowering our sales margins to be able to pass this adjustment on to final consumers. However, steelmakers' commercial dealings are not so flexible with traders," he said.
A service centre representative expressed concern that steel consumption in Spain is already being affected by higher prices. “Construction companies are reassessing their investments and that is indirectly affecting business. Efforts to improve the added value of our services, as well as improve equipment and build new storage yards, are in vain,” he commented.
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Very good overview of the weekly steel market.