The European stainless flat steel market remains under pressure due to persistent overcapacity and slow demand from buyers, sources from both southern and northern Europe tell Kallanish.
A northern European coil buyer however shows a measured sense of optimism about future market conditions. With Asian producers raising their coil prices and the dollar gaining strength, there is likely to be diminished interest in the import market and European buyers are expected to source coils locally in the upcoming weeks.
Sales of stainless scrap remain limited as mills’ slab and nickel pig iron procurement from Asia is limiting scrap purchase volumes. However, collection levels in Europe are low and scrap prices are trending upwards. “I believe coils will stop falling and material for January delivery may increase slightly or remain stable,” the source comments.
Another source reports a resurgence in activity last week and suggests that buyers are likely to return to the market for coil purchases for January. Flat product inventory levels across the EU are currently medium to low. At the same time, there has been a significant decline in downstream consumption.
In northern and western Europe, current stainless CRC values for November delivery are set at €2,550/tonne ($2,681) delivered, while December delivery is at €2,500/t delivered. By comparison, HRC is at approximately €130-140/t lower.
Several service centres in Europe are implementing aggressive sales strategies and are prepared to discount material to secure orders. This is particularly true in Italy, where subdued activity is maintaining low coil derivative prices, especially for tubes and sheets. Sheet prices in the country range from €2,580-2,650/t ex-works, resulting in compressed margins. Several service centres are currently experiencing financial losses.
Two sources in Italy, a re-roller and a service centre, anticipate an uptick in activity as buyers are likely to restock in the coming days, in preparation for year-end demand. Italian CRC prices are presently below the European average, influenced by low consumption levels, prevailing uncertainty, and a highly competitive market environment.
Italian stainless CRC stands at approximately €2,400-2,450/t delivered, whereas HRC is priced at €2,200-2,250/t delivered. The delivered price for HRC with rough edge is currently at below €2,200/t, sources suggest.
Natalia Capra France
