- 0086(21)62671680
- 62671061
- sales@hyssgroup.com
- Language
According to the British analytical agency MEPS International Ltd., restrictions on the availability of the material continue to stimulate the rise in prices for stainless steel in Europe.
The average European MEPS deal value for 304 series cold-rolled coil in May increased by about € 140 per tonne.
The same growth is expected in June. Prices are expected to remain high while consumption outstrips supply. Most European stainless steel manufacturers now offer 300 series coils for November / December shipments. However, only limited tonnages are available for this period. Consequently, many buyers already want to secure supplies for the next year. Although it is known that the mills have not yet opened their order books for January 2022.
In addition, market participants note the lack of offers from foreign suppliers. Import opportunities from Asia are limited by high demand in the region, persistent problems with container availability and very high transport costs. A fire at YUSCO's Taiwan facility could cause delays for European buyers awaiting shipment of materials from Taiwanese suppliers.
Another problem for buyers is the extremely long delivery times. Many are now wondering how long current price levels are likely to persist if they are required to make purchasing decisions in advance. This is especially noticeable when using existing fixed price agreements with their suppliers - a method that European stainless steel producers were very reluctant to adopt a few years ago.
However, current market conditions have allowed local producers to revert to a base price plus alloy premium for new sales contracts. About half of MEPS respondents in May confirmed that they purchased materials using traditional pricing mechanisms. Many also reported that they still have the option to buy from multiple manufacturers at current prices.
Low inventory levels across Europe enable distributors to successfully withstand rising prices. Many people report high resale margins. Original equipment manufacturers pay whatever it takes to provide the materials needed to keep production lines running. However, a number of end users are now stopping production due to shortages of steel and other key components.
If end users start to delay orders, it may give distributors some breathing room as tonnage may become available to them. However, material shortages are expected to continue to disrupt manufacturing operations in the second half of 2021.
