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Stainless steel supply chain disruption intensifies in Europe

Ferrous metallurgy

Stainless steel supply disruptions in Europe will continue until the end of the second quarter and then subside in the summer months

Stainless steel supply chain disruption intensifies in Europe

Supply shortages can occur when end-user demand increases faster than supply. However, the current problems are largely the result of strikes and delivery delays at several EU steel mills. MEPS respondents continue to report no increase in end-user demands for stainless steel flat products.

Spanish steelmaker Acerinox has been unable to produce or ship any materials from its Cadiz facility since February 5 due to ongoing strikes . Several MEPS respondents suggested that some materials were being sent from its subsidiary Columbus in South Africa to fulfill backlogs of end-user orders. However, distributors and sellers have to wait for the strike to end.

A number of buyers have been informed that the situation at Acerinox may be close to being resolved as plant workers may be offered the opportunity to vote on the mediator's proposal. However, the strike committee opposed this option and the vote did not take place.

Despite efforts to resolve the dispute at Acerinox Europa, “there is no guarantee that it will be resolved in the short term,” the company said in an April 25 announcement . The steel company also confirmed that its Bahru Sustainable facility in Malaysia will cease production in the second quarter due to the current market situation.

Political strikes in Finland were suspended on April 7. Many customers have confirmed that although they have quickly started receiving materials from the Outokumpu site in Tornio, most orders will be delayed by three to four weeks. Buyers remain concerned that if negotiations fail and nationwide strikes resume, their deliveries will be further delayed.

Consequently, Europe's other domestic plants are under pressure. A growing number of buyers are experiencing delivery delays, and some are reporting problems with the quality of the material supplied.

Very little imported stainless steel is arriving at European ports, helping to mitigate the impact of problems with domestic supplies. for the lack of foreign orders placed earlier this year. As a result, inventories across the region are being tightened and some product lines are being destocked.

Most respondents said activity increased this month, but this was due to supply disruptions rather than increased end-user demand . Most buyers expect supply problems to subside in July, when most of the delayed tonnage was due to be delivered and newly placed import orders begin to arrive.

Many respondents are concerned that the summer months could lead to rapid changes situation on the market, which will again put prices under downward pressure.

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