European stainless steel prices down on low demand, production cuts

European price ranges for stainless flat steel products narrowed downward on Friday November 1, due to low demand and reduced production, with cheap imports also having an influence, Fastmarkets has heard.

Fastmarkets’ monthly price assessment for stainless steel cold-rolled sheet, 2mm, grade 304, transaction domestic, delivered North Europe, was €2,600-2,650 ($2,824-2,879) per tonne on Friday, narrowing downward from €2,600-2,780 on October 4.

Three major European stainless steel mills confirmed to Fastmarkets that they had revised their production volumes for the fourth quarter, with another market source saying that others had made similar decisions.

“Demand is virtually gone, but the reduced output has helped to keep prices stable,” a trader source told Fastmarkets.

“The mills are trying to keep prices alive, but in the long term it doesn’t seem viable, price-wise,” a second source told Fastmarkets. “I expect [there to be] a drop in prices as early as the first week of November, and it could continue through to the end of the year.”

Another factor that played a role in mills’ decisions to reduce output was the expectation of increased imports of Taiwanese and Indonesian material, which were possible due to the EU import quota being reset for the fourth quarter.

“Even with [anti-dumping and anti-circumvention] duties, Taiwanese prices are much lower. If the price difference is too big, it still makes sense for them to sell in Europe,” a third trader told Fastmarkets.

“I think the import quota reset has played a part when talking about the reduced output, for sure,” a fourth source told Fastmarkets.

The alloy surcharge for grade-304 material rose on Friday.

Fastmarkets’ monthly assessment of the stainless steel cold-rolled sheet, 2mm, grade 304 alloy surcharge, domestic, Europe, was €2,077-2,114 per tonne on November 1, up by €91-114 per tonne from €1,963-2,023 per tonne a month earlier.

The assessment on September 6 was €1,999-2,051 per tonne, down by €109-111 per tonne from €2,110-2,160 on August 2.

Another factor that affected the price of stainless steel flat products in October was the slower fall in the price for stainless scrap. Fastmarkets’ weekly assessment of the price for stainless steel scrap 18/8 solids, import, cif main European port, averaged €1,162.50 per tonne in October.

This continued the downward trend that started in May-when the average was €1,430 per tonne.

Zdravko Cherkezov Sofia contributed to this story.

Published by: Todor Shishkov

Consumers want green steel, state aid inevitable: Arnaud Guerendel

Given the vast cost involved, state aid is inevitable for steelmakers to be able to transition to low-emission steelmaking, while the majority of consumers have shown a willingness to pay a premium for green steel, says Vulcan Green Steel vice president of sales Arnaud Guerendel.

“Steelmakers’ limited financial sources make it questionable to transition current carbon emissions to zero, as the capex is $1 billion needed for every million tonne of steel capacity for hydrogen-based DRI and EAF route production transformed from blast furnaces,” Guerendel said during Kallanish Flat Steel 2024 in Istanbul last week. “Government aid is unavoidable.”

Some 30-35% of steel applications will be sustainable in Europe by 2035, equating to 25-35 million tonnes/year of low-CO2-emission flat products demand.

Citing a BCG survey of consumers in a few major countries, Guerendel said 57% of consumers care about net zero carbon emissions and consider this when making their next purchases of food packaging, DIY, household, and other consumer goods. When it comes to buying cars, the willingness of consumers to pay a premium for zero carbon emissions varies between 84% and 88%, depending on the type of engine (combustion engine and EV). For white goods, this willingness is at 94%.

The sensitivity and goodwill of buyers is being exploited, however. A study in Europe found that 42% of green claims were exaggerated, false or misleading, suggesting greenwashing on an industrial scale.

Scrap shortages are meanwhile also inevitable, Guerendel observed. In the best case scenario, the recyclability ratio even for the most advanced circulation system will reach only 30%. Whatever scrap trade restrictions are chosen therefore, these will not prevent a shortage.

Demand for green direct reduced iron will therefore be the primary beneficiary. DRI’s share of total metallics demand is projected to rise from the current 6% to 13% by 2050, with production expected to grow nearly five times faster than total metallics demand, reaching 320mt.

It is anticipated that by 2050, almost half of all DRI produced will be hydrogen-based. As new processing hubs emerge, it is expected that by 2050, approximately 25% of DRI supply will be traded, compared with just 7% at present. DRI exports from the Middle East are expected to reach 35-40mt, Guerendel concluded.

Burak Odabasi Turkey

kallanish.com