The European market for rolled stainless steel products, including wire rods, rods and other niche products, is experiencing a steady decline, and prices, according to supplier sources, have reached their lowest level in recent years.
The managers of the two plants indicate that inventory levels remain high, although they are gradually decreasing as the market adjusts to excess capacity. "Current market conditions indicate an overwhelming imbalance in favor of buyers, especially those end users who have significant purchasing power," one of the sources[b]Kallanish[/b]reports. Demand remains low, both real and apparent.
In response to the reduction in consumption, Europe is going through a period that can be described as a "new normal": factories are adjusting their work, stopping equipment for several days every month to adjust to the current level of demand. The stainless steel long products segment is going through a "recession phase not only in Europe, but also in the USA and Asia," another source at the Northern European plant comments
The US tariffs significantly affect manufacturers in both Asia and Europe. Supplies of materials from Asia, especially from China and India, are currently shifting towards Europe. EU quotas effectively restrain the steady supply of products of Asian origin, but do not completely stop the influx of raw materials into the market, which "remains huge," the source adds.
One factory reports continued sales in the United States; however, American customers have wisely reduced their orders, choosing to purchase only what is necessary to mitigate the effects of the tariffs. It is estimated that EU factories have lost about 30% of their sales in the US due to the tariffs.
The revision of EU protective measures has proved ineffective for the European long-range stainless steel sector. At the European level, no measures are being taken to protect this segment from significant imports, which is largely due to influential lobbying on the part of buyers.
The end-user sectors reported a decrease in consumption of long pipes last year. The US oil and gas sector has reduced investments. One source indicates that the current driving force of demand in Europe is the defense sector, which is expected to maintain its momentum due to the planned increase in production capacity.
When asked about possible forecasts for recovery, both sources agreed that "there are no prospects." Nevertheless, certain macroeconomic changes can lead to favorable results.
