Prices of stainless steel flat products in Europe are showing signs of approaching a floor, largely due to reduced supply, industry sources told Fastmarkets on Friday July 7.Stainless steel mills in Europe are understood to have been operating at significantly reduced rates during the second quarter because of poor demand and low prices.
Fastmarkets’ monthly assessment of stainless steel cold-rolled sheet 2mm grade 304 transaction domestic, delivered North Europe was €2,500-2,600 ($2,717-2,826) per tonne on Friday, widening downward by €50 from €2,550-2,600 per tonne one month earlier.
In addition to the reduced supply, stabilizing stainless steel scrap prices have been a factor in the stainless steel prices approaching the bottom, the source added.
Fastmarkets’ weekly assessment for stainless steel scrap 18/8 solids import, cif main European port was €1,120-1,170 per tonne on Friday, widening downward by €30 from €1,150-1,170 per tonne one week prior, but up from the low point of the year of €1,070-1,120 per tonne on June 23.
Following months of decline, these factors hint at a potential shift in market dynamics. Stainless steel mills’ unwillingness to sell below a certain level has reduced negotiations with distributors to a minimum.
“Production will see a contraction and the lower availability of material will keep the price from decreasing,” a distributor said.
With the industry heading into the traditionally slow summer months, attention is turning towards the anticipated return of demand in September.
“The [end-user] price will gradually reach more reasonable levels for the distributor, who will be able to start rebuilding his margin. Due to lower availability, special steels could see their price increase more clearly,” the distributor added.
Fastmarket’s monthly stainless steel cold-rolled sheet 2mm grade 304 alloy surcharge domestic, Europe was €2,382-2,403 per tonne on Friday, down from €2,506-2,518 per tonne one month earlier.
Surcharges for July will typically be based on alloy component costs between May 20 and June 21, when the average three-month daily official nickel price on the London Metal Exchange was $21,544 per tonne, a $1,732-per-tonne decline from $23,276 per tonne one month earlier.
Published by: Zdravko Cherkezov
