A better start to 2023 than widely expected
Despite the “energy crisis” headlines, the start of 2023 has been better for the stainless steel industry than most economic researchers predicted.
A mild winter, sufficient stocks of gas, an increased production of French nuclear power and, last but not least, strong discipline in all areas with regard to energy consumption halted the upward trend in energy prices which, of course, is good news for an energy-intensive industry like stainless steel production. Furthermore, the order books of all leading industries remain above forecast and, despite the counter-pressure of high inflation rates, the effects of lower purchasing power are not as strong as feared.
Imports of finished stainless into the European market are not as significant as they have been; all in all, capacity utilization rates among Europe’s stainless mills are satisfactory. More problematic, however, is the price level for stainless finished goods: price increases are only happening to a small extent and further hikes are necessary to compensate for higher costs in the production chain.
Demand for stainless scrap remained strong during the first month of the year, with fewer exports out of Europe and additional imports helping to somehow level the supply-demand equilibrium.
However, demand is expected to soften heading towards the second quarter, putting price pressure on underlying raw materials.