The MetalMiner Team | Posted on September 2, 2022 |

Stainless steel prices continue to struggle as we approach the final quarter of the year. Meanwhile, nickel prices float just above their 2021 average, closing August at $21,320 / mt. Both indices seem to indicate an overly-cautious marketplace, with buyers and sellers seemingly waiting to see what the other will do.

This sort of “commodity” standoff is less than ideal. MetalMiner has recommended that buyers of flat-rolled stainless expect lower transaction prices as we move into autumn. After all, alloy surcharges are low, and competition between service centers is higher. In fact, many U.S. flat-rolled mills have no customers on allocation, thanks to imports affecting overall supply.

Still, the battle between supply and demand is a never-ending one. And in a tight market full of people looking to maximize their dollar, anything can happen.

Learn how to gauge metal prices, stainless steel and new technology metals in MetalMiner’s free September Webinar. Sign up here!

What would happen if the stainless steel market suddenly lost millions of tons of production? We won’t have to wait long to find out the answer because it’s already happening. As August ended, more and more reports came in detailing European stainless steel producers having to scale back or shut down production altogether.

Of course, Europe faces a catastrophic energy crisis. While many economists remain focused on the coming winter, Putin’s retaliatory gas cutoff has done plenty of damage already. So far, around three million tons of Europe’s stainless steel capacity is at risk. With energy costs surging, many plants simply can’t afford to “keep the lights on,” so to speak.

Earlier in August, the Belgian Aperam Mill shut down its mill in Genk. Soon after, they reduced production at their Chatelet Mill. More recently, Spanish company Acrinox announced it would cut production and place around 85% of its employees on short-time work. Obviously, all eyes are now on other major European producers, many of whom have just as much incentive to cut and run.

MetalMiner’s free weekly newsletter provides up-to-date stainless steel intelligence to buyers all around the globe. Sign up here!

While no specifics exist, there are reports of European buyers stocking up on stainless steel in anticipation of an upcoming price hike. It makes sense. If supply falls, prices will indeed go back up. However, reactionary buying is also a surefire way to hasten this process. 

Moreover, it may be a myopic way of approaching things. After all, China ramped up its stainless output and has been all month long. Though its construction sector remains strained, the central government nonetheless continues pumping billions into the economy to stave off recession.

That makes exportation a likely option. China holds its place as the world’s largest stainless steel producer. And while China also the largest consumer, that part of the equation is temporarily unavailable. A high likelihood exists that the government sees opportunity in these European shutdowns.

After recent announcements regarding Ningde City, which the country hopes to develop into a sort of “stainless steel mecca,” clearly China has big plans. According to reports, China wants the area to produce 7 million metric tons by the middle of this decade.

If push comes to shove, China has Putin’s energy supplies on its side, Europe does not.

Buy stainless steel with confidence. MetalMiner Insights offers in-depth purchasing advice, price comparison tools, forecasts and comprehensive should-cost models. Click to schedule a demo.

Filed under: Commodities, Ferrous Metals, Stainless Steel, Supply & Demand

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Aluminum aluminum price aluminum price index anti-dumping China china aluminum coking coal price Copper copper price copper price index ferrochrome price ferromoly price Ferrous Metals GOES price Gold gold price Green India Iron Ore iron ore price L1 L9 LME LME aluminum LME copper LME nickel LME steel billet nickel price Non-ferrous Metals Oil palladium price platinum price precious metals prices rare earths scrap aluminum price scrap copper price scrap stainless price scrap steel price silver price Stainless Steel stainless steel price Steel steel futures price steel price steel price index

MetalMiner helps buying organizations better manage margins, smooth commodity volatility, generate cost savings and negotiate prices for metal commodities. The company does this through a unique forecasting lens using artificial intelligence (AI), technical analysis (TA) and deep subject matter expertise.

©2022 MetalMiner  All rights reserved. | Cookie Consent Settings & Privacy Policy | Terms of Service