Producer profitability still under pressure in Europe

The stainless steel industry has headed into the summer period, traditionally a time of reduced production and therefore lower demand for raw material.

Thus far in 2024, Europe’s stainless industry has experienced an eventful year. One of the four leading flat producers was hit by a strike lasting more than 100 days while stainless steel scrap became relatively expensive, particularly in comparison to the Asian alternative of nickel pig iron.

European mills are executing their respective environmental, social and governance strategies with a clear focus on further reducing their greenhouse gas footprint. Consequently, demand for stainless scrap has increased and the differential to environmental-unfriendly alternatives such as nickel pig iron could be defined as the “green bonus”. It needs to be understood that the profitability of leading stainless flat producers in Europe is still under pressure.

The summer period will be characterized by lower stainless scrap demand and a reduced output of liquid steel.

For the rest of this year, stainless production should follow the current trend of Europe’s economies which are expected to move sideways, if not lower.