EU stainless supply issues persist as Acerinox strike continues

31st May 2024

Supply issues continue to dominate market discussions in Europe this month as their impact on material availability begins to increase.

Nevertheless, most MEPS respondents remain confident that they have enough inventory to cover the existing supply disruptions, at the current level of demand.

This is despite many of them holding lower stocks than usual.

Buyers report lower availability of speciality grades and sizes, particularly in the ferritic range.

Several said that stocks of certain thicknesses and widths of 304 BA and 304 2B material are also dwindling.

However, this has still not triggered any panic buying.

After more than three months on strike, the workers at Acerinox’s Los Barrios plant in Cadiz overwhelmingly rejected the latest proposal to settle the dispute and resume work.

As a result, delivery lead times from other European mills have started to extend, and an increasing number of purchasing managers are experiencing shipment delays.

With the summer and the traditional mill maintenance period approaching in Europe, most local producers are now offering August/September delivery lead times, with just a few tonnages still available for July production.

Substantial volumes of imported material, ordered from overseas suppliers in March/April, are expected to start arriving in July.

Import price offers increased in May due to a rise in nickel values, but those for cold rolled coil still present buyers with a saving when compared with European mills’ prices.

However, the risks of importing from Asia continue to grow.

According to Drewry, on May 23, freight rates from Shanghai to Rotterdam increased by 20 percent, week-on-week, to USD4,999 per 40ft container.

Break bulk shipments are being offered as a cheaper alternative to containers.

With limited buying options and rising raw material input costs, European producers have remained relatively firm on their offer prices.

The MEPS Europe average for 304 cold rolled coil rose in May.

Most respondents said that the mills are likely to continue pushing for further increases in June.

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