STEEL NEWS

MEPS: EU stainless steel buyers worried about limited supply

Material shortages and high prices will remain key characteristics of the European stainless steel market in the last few months of 2021, according to British analytical agency MEPS International Ltd. The supply and demand imbalance caused by the pandemic continues to disrupt global supply chains.

Manufacturing companies around the world are still struggling with material and component shortages. The most famous effect is a decrease in car production due to a lack of semiconductors. However, this is just one of many bottlenecks.

In Europe, the availability of domestic stainless steel remains limited. Steelworkers were unable to supply enough tonnage to service centers and distributors due to the rapid growth in demand at the end of 2020. Initially, this was most noticeable in the flat products categories due to the strong recovery in the demands of the automotive and commodity industries.

Delivery times vary between factories, but typically range from January to April next year for 300 series stainless steel coils. That's a far cry from the four-week shipping times that many pre-Covid buyers are used to. The delivery times offered by the regional bar mills are even longer - until May / June 2022.

Manufacturers remain bullish on steel prices. The current volume of imports is of little concern to domestic stainless steel producers. The recent fire at the Marcegaglia plant is likely to further reduce the supply of cold rolled coils, especially to southern Europe, in the near future.

Buyers confirm that local businesses remain bullish on pricing. They are reported to be reluctant to lower their sales value because their order books have expanded. In addition, rising energy and raw material costs are expected to put additional upward pressure on the value of stainless steel deals in the last two months of 2021.

However, a sustained slowdown in buying activity may lead to the fact that during this period an increasing number of customers will begin to resist further price increases.