Demand for stockholding distributors in Europe decreased by 20-60pc in March, with the construction, machine building, and manufacturing sectors hardest hit, according to EUROMETAL.
The automotive industry comprises nearly 50pc of European steel service centres’ (SSC) sales, but the former has suffered a dearth of activity since Europe began its lockdown in response to the COVID-19 outbreak. Consequently, SSC sales have declined because, since last month, some companies have operated at 20-25pc capacities, while others are at 80-85pc.
Amid the persistent crisis, distributors and SSCs are grappling with a slew of issues, including employee safety, sales and pricing trends, fulfilling customers’ orders, inventory and logistics, procuring payments, fixed and variable costs, and establishing digitized business models in the future. EUROMETAL anticipates 2020 will be one of the worst years on record for distributors, trades and SSCs going back 60 or 70 years.
There is optimism that recovery will begin as early as next month, though, with order books showing some improvement. Sales are projected to be 55-65pc of the budgeted annual sales plan in northwest, northeast, and southern Europe. Moreover, the construction sector will likely recover, added EUROMETAL, over the next few months, but distributors’ Q1 results will still suffer.