EU mills want stainless price rises after slow January

European stainless steel producers are targeting higher sales prices despite struggling to fill their February and March order books in a slow start to 2025.

Research conducted for MEPS’s latest Stainless Steel Review showed that delivery lead times for hot and cold rolled coil and sheet remain exceptionally short.   

While distributors’ buying activity increased in January, compared with December, most material was purchased to fulfil immediate requirements rather than to build inventories. Consequently, stainless steel mills in Europe continue to operate at reduced production levels.  

MEPS International stainless steel market analyst Michelle Kirton said: “In times of weak demand and low prices, mills prefer to cut production rather than operate at a loss.”

Outokumpu halted operations at its Tornio plant from January 27 to February 1 due to a workers’ strike over pay and working conditions. However, this temporary stoppage is not expected to cause any significant disruptions to its production or deliveries to customers.   

Profitability challenges

Producers are dissatisfied with the low prices of hot and cold rolled coil and sheet. The MEPS European average transaction price for grade 304 cold rolled coil settled at EUR2,426-2,483 per tonne in January. Furthermore, the lower range of the grade 316 extra fell and it now stands at EUR1,300-EUR1,350 per tonne. The mills indicate that they are struggling to maintain profitability at these levels, with some issuing profit warnings in recent financial updates.  

Purchasing managers tell MEPS that EU producers are attempting to raise prices by EUR30-40 per tonne for March production. Discounts are still being offered, however, undermining their efforts. Rising energy costs are further squeezing mills’ margins, while weak end-user demand leaves buyers reluctant to accept any price increases.    

MEPS respondents quote grade 304 cold rolled sheet distribution selling prices at EUR2,570-2,650 per tonne, leaving little room for profit. Some distributors are facing cashflow issues. These are further exacerbated by financial struggles among their customers, particularly those within the automotive and construction supply chains.   

Q1 duties raise import costs

European producers hope that higher prices will be realised in the coming months, partly due to issues with Taiwanese imports. The European safeguard quota for imports of Taiwanese cold rolled coil and sheet was exceeded within the first few days of January, resulting in the application of an 8% duty on material customs cleared at that time. For grade 304 cold rolled coil this has added an extra EUR150-200 per tonne to the price, which buyers will try to pass on to their customers. Some have opted to leave their material in port warehouses until the next quota period opens on April 1, though this option comes with additional storage and handling fees.   

Further complicating matters for importers, the Taiwanese government’s quarterly export quotas have already been exhausted by several suppliers. Consequently, they will be unable to ship material to Europe for the next few months.   

Kirton said: "The imports that came in at the start of the new quota period, in January, are likely to keep downward pressure on prices as a whole. However, the extra duties incurred by the importers on some of those products will mean that profit margins will take a hit if they don't try to pass on some or all of that extra cost."

While the majority of overseas offers still present a cost advantage over those from European mills, the list of associated risks is growing. EU safeguard quota exhaustion, increased reporting requirements under the EU’s Carbon Border Adjustment Mechanism (CBAM) and longer delivery lead times are deterring some import activity. A decrease in imports is therefore anticipated in the quarter two quota period. However, any above-quota volumes left in port storage during quarter one will be awaiting customs clearance on April 1. 

• This content first appeared in the January edition of MEPS International's Stainless Steel Review. The publication features market insight, stainless steel prices, indices and forecasts from key markets in Europe, Asia and North America. Visit mepsinternational.com or contact MEPS for details of how to subscribe.