European stainless flat prices are continuing to rise for coils, sheets and tubes despite demand remaining flat, market sources tell Kallanish.
End-user consumption is reported as unchanged, but costs are climbing due to the Middle East conflict, pushing mills to keep lifting coil values. For July delivery, European mills have moved cold rolled coil to €2,700-2,740/tonne ($3,141-3,187/t) delivered. June delivery CRC is currently averaging €2,680/t delivered across Europe.
Several distributors report a challenging market as rising prices coincide with slow downstream demand, particularly in Italy where CRC prices continue to lag European levels.
European mills report a restocking phase and improved activity as imported coil stocks are depleted and fresh imports dry up amid CBAM and changing trade measures.
End-user demand, however, remains unchanged, Outokumpu chief executive Kati ter Horst said earlier this month during the company’s first-quarter earnings call. Last month, during Aperam’s earnings call, ceo Sud Sivaji also reported a slight restocking effect but warned that underlying demand in Europe is not improving, describing it as “flat at a very low level… we’re talking 20% below past averages”.
Northern European sources agree demand is flat. Stainless steel processors warn of weakening margins.
Until recently, distributors benefited from material bought at lower prices before values rose, keeping margins profitable. Now service centres and distributors are buying at elevated prices and struggling to pass on increases in a slow market. Sources in Germany, Italy, Poland and elsewhere report being forced into price concessions downstream, squeezing margins further.
Low imports are pushing buyers to increase European purchases significantly, but some sources still see oversupply given continued weak consumption. Mills are said to be targeting €2,900/t delivered for CRC by end of the third quarter, with increases expected to accelerate once the new trade measures take effect in July.
Despite the challenging downstream environment, no buyer anticipates price decreases in the coming months, though maintaining margins and profitability will not always be possible.
In Italy, steel processors are resisting sheet sales below €2,790/t, while sheet prices are being pushed towards €2,900/t across Europe.
“Underlying demand is not good, also because of the war in the Middle East. Investments at our clients are being postponed,” a Northern European service centre tells Kallanish. The source also expresses concern that despite weak consumption, European mills will raise capacity on the back of recent investment programmes.
