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New year begins with a shift in sentiment

2022 started with lower order intakes for Europe’s leading stainless steel flat producers, partly because of the continuing negative effect of the pandemic on all parts of the stainless supply chain and therefore on demand. At the same time, there have been significant increases in all costs relating to the production of stainless steel such as energy, electrodes, ferro-silicon and stainless scrap, thereby pushing finished goods prices substantially higher and impairing the demand dynamic.

Other factors that have negatively impacted European mills’ order intakes include: an increase in imports of stainless finished goods for a fifth consecutive month; price levels for finished goods in the Far East being well below European market levels and thus attracting even more import volumes; and stocks of finished goods in Germany reaching new highs.

Sentiment has changed from the beginning of the year and further developments need to be analysed carefully.

Ferrous scrap prices have somehow stabilized while ferro-chrome values are expected to be reduced by the end of March as the differentials to other core markets such as India and China are too wide. Stainless scrap availability has been as expected, supported by stronger nickel prices; the metal has shown some momentum on the LME with its price trading around US$ 23,000 per tonne at the time of writing.