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Scrap availability diluted by weak industrial and manufacturing activity

Recently-released economic data on Europe have produced a small glimmer of hope: the European Commission is reporting a 0.3% GDP increase for the opening quarter of 2024, the first indication of growth since the fourth quarter of 2022. In between, the overall economy stagnated while industrial production and manufacturing activities shrank. In this environment, European stainless use and production saw a considerable reduction. According to figures published recently by worldstainless, European output of crude stainless steel declined by more than 6% last year to 5.9 million tonnes despite the typical seasonal improvement in the fourth quarter.

This year started stronger than expected, supported by a further seasonal uptick in stainless steel demand as well as historically low imports and import penetration levels. European crude stainless production, however, has been impacted by strikes, with one of the larger producers even being affected since February. Despite this, overall mill demand for stainless scrap was robust during the first quarter.

European scrap availability continued to be affected by ongoing weakness in industrial and manufacturing activities. During the first two months of the year, the EU recorded an increase of more than 50% in net imports of stainless scrap from third countries when compared to the same period in 2023.

While the European business climate is gradually starting to improve, a recovery in the stainless segment is yet to come. Some analysts, however, are expecting a two-digit year-on-year increase in apparent use of stainless for 2024.