SteelOrbis recently spoke with Enrico Fornelli, sales manager with Italian longs producer Beltrame*, concerning the current situation in the markets, the steps being taken to stimulate recovery, and the difficulties facing steel companies
Mr. Fornelli, in this current market situation, people seem to be disoriented. What are market players saying?
It is very important to take stock of the current situation and to understand where we are right now, where we can go and which roads can be followed. From this point of view, the atmosphere is positive: everyone wants to deal with this situation instead of being overwhelmed by it.
In this context, as a first step each producer should send positive signals to the market...
I strongly believe they should. Indeed, Beltrame has published its new price list for merchant bars in the Italian market, and from March 23, 2009 we are doing the same also for the other European markets.
The good news is that these steps have been sought by our customers. Our customers said to us, "Give us a signal and we will follow you."
What do you think of the government's new stimulus packages?
The assistance given in terms of infrastructure will be useful; however, it will take some time for the steel industry to feel the benefits.
Anyway, everything that helps the industry is welcome and will bring some advantage, in particular in a difficult situation like the one we are facing now and which we will be facing for some time yet.
With such current difficulties, are there any possibilities of M&As?
Unfortunately we are unable to forecast any scenarios in this regard. Anything can happen. The only thing to do is to try to manage the markets and not end up being squeezed by them.
On the one hand, it is possible that some weak companies may have to face an unhappy end; however, on the other hand, the big companies have to seek ways to maintain their position, being mindful that they could also end up in an unpleasant way.
The market is changing and when we emerge from this period the market will be very different. It will not be possible to use the same parameters we used in the past. We will have to be ready for these changes, to manage them and be active, if we want to survive and remain competitive.
*Beltrame is the European leader in the production of commercial rolled sections as well as the main producer of special bars for shipbuilding and earth-moving machines. It is the only steel producing group in Europe with an annual production capacity exceeding three million tons. The group produces steel at three EAF plants and eleven rolling lines, spanning eight locations in Italy, France, Luxemburg and Belgium.