EU stainless market may suffer until 2023

A recovery in the European stainless steel market to levels prior to the Covid-19 pandemic will take significantly longer than many anticipate, says Joost van Kleef, commercial director of stainless scrap merchant group Oryx Stainless.

Although demand for stainless steel has recovered from its lowest levels in March and April, overall European demand is not expected to exceed 70% of pre-pandemic levels. Some leading market analysts forecast that a return to pre-pandemic levels will not occur until 2023, van Kleef writes in the latest Bureau of International Recycling (BIR) stainless steel mirror.

“The stainless steel market was weak for most of the recent years, but it looked like it would pick up this year,” Oryx chief financial officer Roland Mauss tells Kallanish. “China seemed to achieve a turnaround – but then Covid-19 came.” He notes that the stainless market has meanwhile started to recover, especially in Asia. Availability of stainless scrap has improved, too, and is basically in line with demand, “…so that the price level won’t change too much,” he adds.

For Europe, import penetration will remain a challenge, van Kleef notes in his article. “The latest development within Taiwan should be seen as a warning sign,” he says, referring to the closure of furnaces in favour of importing stainless slab from Indonesia. Van Kleef criticises the deeper environmental impact of using Indonesian-produced slab rather than melting scrap.