European stainless overcapacity hampers sales

The European tube and flat stainless steel market is struggling with low prices despite orders from distributors having picked up slightly in recent days, service centres and re-rollers tell Kallanish.

The market for stainless flat and tube products is still feeling the consequences of the global health crisis and weak demand from end-use sectors. With stocks very high in most European countries, destocking and uncertainty are still hampering sales.

Some European flat stainless steelmakers continue to produce at full capacity and are adopting very aggressive commercial strategies. “Unless Aperam and Outokumpu implement some stoppages to cut overcapacity, demand for stainless in Europe will not resume,” a coil buyer believes. Other mills in Europe, however, have reduced output by some -40% in the past weeks. Producers are still facing poor order levels and short delivery times.

Eastern European countries are currently driving demand in Europe, together with Scandinavia. Germany is particularly sluggish. The country is facing massive destocking and poor orders from service centres and distributors, sources indicate.

French activity is slowly picking up, while Italian stainless flats and tubes consumption has fallen by an average of -25% year-on-year in the second quarter. Prices for both tubes and re-rolled flat products have lost €50/tonne on average in June and more falls are expected.

Stainless hot rolled coil in Europe is at €1,650/t ($1,866) delivered on average this month. Cold rolled coil is at €1,780-1,800/t delivered on average, down some €30/t ($33.8/t) month-on-month, sources suggest.