A word with the wire manufacturer Trafilerie Galli: between investments and soaring prices

The raw material shortage crisis that began a year ago is far from stabilizing. The emergency is further aggravated by the sharp, double-digit increases in energy costs that have affected all sectors, including the steel industry. It is becoming progressively harder for companies to sustain the soaring prices, and even more difficult to balance budgets, manage orders, and plan investments.

We take stock of the situation with Mario Galli, owner of the historic Italy-based wire drawing company Trafilerie Galli, specializing in the production of low- and medium-carbon steel wire since 1969.

What were the causes of the rise in raw material prices?
There are plenty of factors that have affected the wire rod prices: the exclusion of China from the European market, the new decarbonization trend, the trade war, and the implementation of protectionist policies towards non-European goods are just some. The lack of foreign competitors has, then, paved the way for Italian wire rod manufacturers to dictate prices and supply conditions.

What have the repercussions been for your business?
Trafilerie Galli is an increasingly well-known name throughout Europe; exports account for about 50% of our turnover. The continuous delays on the part of the steel mills and the consequent supply difficulties have not created excessive upheaval, but they have nonetheless caused delivery delays. We have had a few more issues with exports to the East, a market that now appears to be even more problematic due to the war: European steelworks use pig iron, scrap, and billets from Ukraine and Russia and the current situation will most definitely cause further slowdowns in the supply chain.

What changes did you have to make to your business model to cope with this situation?
To cope with the increased cash flows in circulation, we had to plan our budget more carefully. We are going on with our work as usual. Of course, we have lost a small share in the foreign market, but we have managed to compensate by increasing our presence in Italy.

What is the outlook for the months to come?
If I knew that, I'd be rich by now (laughs). It's quite difficult to make reliable predictions. Until 15 days ago, prices were expected to fall by the end of April. The winds of war have considerably changed the scenarios. I don't think there will be any changes in the short-medium term, if not at worst, an upward trend.

Do you have plans in the pipeline for the near future? If yes, which ones?
We will continue to do what we do best: drawing wire!
We plan to further expand the range of production and packaging solutions available. We have recently purchased a new drawing line for the production of low-carbon bright wire up to ø10mm in diameter. It will also soon be available on wire carriers.

For further information and requests, contact Trafilerie Galli using the references on the right.