Shortages push up EU stainless flats prices

European stainless hot and cold rolled coil prices are continuing to increase together with values for sheet and other coil derivatives including tube, market sources tell Kallanish.

The shortage, particularly for flat products, is worsening due to very high demand and very low import tonnages. Producers in Asian countries are only selling to their traditional customers, accepting no new clients. Limited CRC and HRC sales windows are opening and closing fast from Asian producers, particularly from Taiwan. This is failing to compensate for short supply from European producers.

The sector is going through a period of “open prices”, sources observe. Sellers of both coils and sheets are not quoting, but nevertheless still bagging a large number of orders that bear no quotes. Since base and alloy values are changing constantly almost every week, it has become widely accepted for prices to be specified shortly before the time of delivery.

At present, buyers in all European countries consider the most important thing is securing supply to satisfy their full order books. Prices are not a concern. All coil increases are or will be applied to derivatives before delivery. A source comments that such an “open price” market anomaly has now become normal.

A source says mills are putting customers on waiting lists due to shortages. “It is the first time that something like that happens,” he comments. “If a customer asks for 1,000 tonnes, the mill will allocate 300 tonnes. Prices for coils are calculated on base plus alloy surcharges but producers do not know what base prices and alloy surcharges will be in three to four months, so they give indicative prices that will certainly change, or prefer not to quote at all.”

Stocks in Germany are said to be particularly low. Southern and Eastern European distributors and sellers however report a similar situation in their own respective markets.

CRC for October and November delivery is quoted at €3,300/tonne ($3,940) and about €120-130/t less for HRC – this is for larger tonnages, sources say.

While volumes have not particularly increased compared to previous years, margins and prices remain high throughout the value chain. Most companies will this year exceed their annual financial targets, sources agree.

Natalia Capra France