Posted on 30 Oct 2019
Marcegaglia chief executive Antonio Marcegaglia believes the bottom of the current cycle for steel prices and margins in Europe will be reached in the fourth quarter. A recovery should be seen from the beginning of 2020.
The executive believes current prices in Europe are clearly not sustainable and the market is highly affected by negative sentiment. He expects apparent demand to catch up with real demand from the beginning of next year.
In addition, Marcegaglia expects support from international issues continuing to affect global steel market sentiment. He believes trade tensions between the USA and China will ease as the US elections approach, while Brexit uncertainty could be reduced going forward.
“I believe production cuts in Europe were done a little later than needed,” Antonio Marcegaglia said during his presentation at this week's World Steel Dynamics event in Milan. “Nevertheless, the effect of such production cuts will also have a direct positive impact on prices and margins for steel products in the next months.”
A number of European steelmakers announced production cuts in recent weeks (see Kallanish passim). Marcegaglia calculated these cuts could amount to some 6 million tonnes/year of annualised capacity across Europe.
Marcegaglia is the largest global independent buyer of steel products. In 2018 the company purchased some 5.8 million tonnes of steel products, selling around 5.3mt of finished goods in the international market.
