Home / Main / European prices for stainless steel products are about to touch the bottom - MEPS

European prices for stainless steel products are about to touch the bottom - MEPS

Main / Europe

As Europe's summer holidays begin, market participants believe that stainless steel prices are approaching the low end of the current cycle.

European prices for stainless steel products are about to touch the bottom - MEPS

Average stainless steel prices in Europe are at a level slightly higher than what was recorded at the beginning of coronavirus restrictions in 2020 and has every chance of falling even lower, MEPS analysts write in their market review.

“There are rumors in the market that prices for cold rolled coil could fall below 2,000 euros per tonne in July and August. Despite inflated energy, labor and financial costs, factory contract costs are dropping to pre-pandemic levels.

On the contrary, MEPS notes that stainless steel prices in Asia and the US remain high, despite the fact that they have declined from their peak values. The pace and extent of the decline in these regions was significantly less than in Europe.

This has resulted in an unusual scenario for buyers in Europe where import offers are more expensive than domestic producer prices.

Sources say Indonesian 304 cold rolled coil is being offered at 2050 - 2100 US dollars per ton on CIF terms in a European port. Chinese exporters are asking for a little more.

Quotations from India, South Korea, Taiwan and Vietnam are even less competitive and range from $2,300 to $2,500 per ton.

After converting to euros and taking into account any necessary duties and additional costs, most of these transactions are more expensive than ordering on the spot.

However, attempts by European factories to replenish their portfolios of orders at the expense of discount offers do not give the desired effect. Orders are still difficult to secure, regardless of the price level.

Many sellers say that despite destocking in the region, they are still too high for current demand.

In the distribution market, resale prices are particularly competitive and materials are often sold for less than their stock or replacement value. As a result, restocking activity is low.

With demand unlikely to pick up until September, European prices are likely to remain under downward pressure in July and August.

Persistently high inflation and monetary tightening in a number of European countries will continue to dampen market activity in the near term.

“Most European stainless steel mills are operating at reduced capacity to reduce supplies and extended shutdowns are likely in the summer. These measures may provide some support to prices later this year,” MEPS concluded.

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