European stainless steel market falters in September

Stainless steel buying activity, in Europe, was weaker than anticipated, in September. Many market participants commented that their sales volumes, this month, were reasonable, but below those in the pre-summer months.

Buyers are uncertain whether this is a temporary dip in post-holiday sales activity, or the stainless market has been unsettled by the softening in carbon steel prices, witnessed over the past few weeks. In either case, it appears that many in the sector have adopted ‘wait and see’ positions.

Nevertheless, European producers remain bullish in their attitude towards pricing levels. Stainless steel prices continued to strengthen in September, most notably for 300 series flat products.

The MEPS Europe 304 cold rolled coil transaction value rose by €297 per tonne, to €3808 per tonne, this month – more than double the figure recorded in September 2020. Meanwhile, the average European price for 316 cold rolled coil increased to €5132 per tonne – nearing the level last reported in summer 2007.

Buyers are becoming increasingly nervous about booking so far in advance, at the current price levels. However, with no real improvement in the availability of stainless steel flat products, they have very few options.

Import volumes are expected to increase, in the coming months, as tonnages ordered previously begin to arrive. Many buyers report that a significant amount of material is awaiting customs clearance on October 1. It is widely anticipated that the quota allowance for both Taiwanese and Turkish cold rolled coil will be exhausted quickly.

Nevertheless, the extension of the EC safeguard quotas, combined with various individual country antidumping duties, will continue to limit import opportunities. Furthermore, expensive freight costs and shipping delays are likely to remain a consideration for those wishing to order from overseas suppliers.

A sustained slowdown in demand may result in buyers beginning to resist further mill basis price hikes, in the near term. Therefore, it is expected that stainless steel transaction prices will come under downward pressure in the final few months of this year.