The difficult international situation due to the war in Ukraine (but not only there), makes the procurement of materials such as steel particularly complex. Hence the difficulties faced by the steel sector, the backbone of the Italian economy, which is in danger of having to slow down or even stop its own production. We talk about this with Marco Gatti, managing director of Steel S.p.A., a company that has been active in steel distribution for almost thirty years.
Mr Gatti, what is the current situation?
‘There is a general difficulty in supplies, due to the increase in energy and gas prices, which inevitably push up the price of steel on the market. Producers are unable to ‘hold’ prices at the pre-2020 level due to rising expenses. Since January 2021, the cost of steel, like other materials, has been rising continuously. And into an already compromised situation have been inserted the effects of the war in Ukraine, with sanctions and restrictions. In short, we are in the middle of a perfect storm’.
A storm that threatens to undermine the economy of our country and beyond.
‘Exactly. Rolled and forged special steels are an essential raw material for fundamental sectors of the Italian economy. We, for example, work for the automotive sector, for oil and gas, and for stamping components to make various types of products. But the impact is international and affects the whole of Europe’.
How can these difficulties be overcome?
‘Certainly the role of distributors is central. Choosing the right one can make all the difference’.
In what sense?
‘Relying on a distributor who has relationships with suppliers from all over the world makes it possible, albeit with difficulty at this time, to get the steel you need at sustainable prices. At the moment, for example, buying steel in many European countries is almost impossible because prices are very high, but it is possible to work in the eastern market, particularly in India. The other feature that can make a difference is the possibility of providing special services.
‘Heat treatment, especially right now, is crucial. It is an indispensable process for the production of certain products, so much so that distributors who are not able to carry it out internally are forced to outsource it. By carrying it out directly, however, it is possible to reduce costs (and thus keep the final price of products lower) and processing times. An aspect, the latter, of fundamental importance at a time like the present.
How much do these ‘requirements’ actually affect a distributor’s business?
‘Very much. We see this from our experience: since the beginning of the war, our turnover has never stopped growing throughout Europe. This means that companies that previously sourced elsewhere are also turning to us.
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