Spanish steel distributor representatives have expressed optimism about the long-term growth prospects of the steel sector, in light of the expected post-pandemic economic recovery and construction and infrastructure sector demand growth.

Meanwhile, the uncertainty in the automotive sector due to the shortage of components, as well as high prices of inputs and electricity is worrying distributors, delegates told Kallanish on the sidelines of the Eurometal Steel Net Forum Iberia in Lisbon on Wednesday.

"We have had a recovery at a higher level than expected in the sector,” one participant comments. “There has been strong post-Covid-19 demand for material, both from construction companies and individuals.”

According to another Spanish steel distributor, however, this momentum may be slowed by high electricity costs, which neared their all-time high in September. “Electricity costs have impacted the steel production chain. High steel prices have carried across the entire industry. So, the energy factor continues to hamper competitiveness against companies abroad,” he says.

A representative from a service centre expressed concern that if distributors do not uniformly maintain sales margins, the good results achieved by the supply chain so far this year will be in vain. "Efforts in maintaining margins should be a priority for all distributors, as they are for steelmakers,” he comments.

This proposal, however, is difficult to implement across the board, since contracts are also influenced by other factors. “Some companies opt for higher sales volume by reducing their margin, while others are forced to maintain lower margins due to their regional proximity to mills,” the service centre source adds.