Order intake weaker than expected

The stainless steel industry is currently heading into its seasonal slowdown. During the summer holiday month, the industry closes sites in order to carry out equipment maintenance, mainly the melt shop. Consequently, demand for raw material is low. The general business mood has also calmed down and order intake is weaker than previously expected. However, PMI indicators remain optimistic in most of the relevant economies. To support this, it will be crucial how the pandemic evolves over the next few weeks; latest developments in certain EU member states are offering something of a warning.

As regards availability of material, there has been a reduced supply as a result of the summer holidays.

Meanwhile, a significant differential has emerged between the ferrous scrap price index in Europe and that in Turkey. There is still heavy demand for high-quality ferrous scrap in Continental Europe, leading to significant price increases over recent weeks and months. In contrast, the Turkish HMS 1/2 price has remained stable at relatively low levels of below US$ 480 per tonne.

There is also a substantial price difference to the blast furnace route based on coke and iron ore.

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