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Although the reasons behind it are not known in depth, it is certainly the case that the 18-month honeymoon period is over for the stainless steel sector and that we are now striding towards a severe recession affecting all operators. We were all aware that growth could not last forever but no-one could have imagined such a sudden collapse.

Demand has slumped across all sectors and has brought with it a collapse in prices. This downward spiral has triggered a panic that has pushed all operators to lower their prices in order to get rid of stocks before prices drop even further, which would bring about even more huge losses.

In recent months, all operators had been caught up by the fear of running out of material and filled up their stocks, effectively saturating the market. This was enough to slow the market and create the panic seen now.

The following issues have contributed to the situation described above: the Ukraine conflict;

the resurgence of the pandemic in China which led to lockdowns in some cities; the energy crisis and subsequent price increases for oil and gas; rising inflation and ensuing increases in interest rates; breakthroughs by Asian countries on the block on imports of finished products through the imposition of duties, and the consequent loss of competitiveness among European operators.

It is hard to say which of these has been the greatest factor in the current situation but certainly the third quarter of this year is the worst seen in recent years. Not even during the COVID pandemic did we witness such a severe period of crisis. Although everyone is talking about a potential recovery in the fourth quarter, no-one can say with absolute certainty that this will happen.

In summary, the stainless steel market began a collapse in June which effectively halved the price of both scrap and finished products in two months, but this decline failed to spark a resumption of demand. And with the arrival of the holiday period, all activities have been postponed until September when it is hoped that we will see a return to normality.