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As the portal reports, in the last weeks of 2020 the European steel market is turning its attention to what the coming year will bring. The second round of restrictions in connection with corona viruses and tightened restrictions is beginning to be lifted in several parts of Europe.

European Stainless Steel Commodities Market
European steel market boosted by vaccination news

This time, the measures in most countries seem to have had only a minimal impact on the recovery compared with the collapse in spring. In addition, positive news on vaccines has helped to boost optimism in the market, although it is likely that the pandemic will continue to disrupt activity at least in the first half of 2021.

Stainless Steel Market demand is improving

Stainless steel demand has improved in several end-user sectors. New car registrations in Europe have returned to pre-pandemic levels. White goods manufacturers are also reportedly busy replenishing their product lines.

However, stocks of stainless steel of certain grades and sizes are currently at a low level, following a relatively lively first quarter of 2020 and no replenishment activities in the period March/September. As a result, order volumes for rolling mills, especially for material destined for these segments, have started to recover.

Positive price development until 2021

Since March, speculative buying decisions have been hampered by the pandemic and the uncertain market conditions it has created. Many buyers continue to procure material that is only needed for immediate use.

The inherently longer lead time for imports, combined with the risks associated with the EC protection quotas, has allowed local steel producers to secure a larger share of domestic orders that might otherwise have been placed with foreign suppliers. As a result, European steel mills are now fully booked until the end of the year and most are reporting good order intake for the first quarter of 2021.

Despite the growth in orders, domestic steel producers continue to operate below normal production levels. Consequently, supply is expected to be limited in the coming months. This, together with a lack of imports at competitive prices, helped European producers to push through price increases in November. Transaction prices for 300 series stainless steel flat products increased by €30 to €50 per tonne.

Market participants reported that suppliers were already discussing a further increase for December in the middle of the month. This is supported by an upward trend in alloy surcharges. In addition, rolling mill input costs rose significantly due to a rise in stainless steel scrap prices in November.

Any price increases will be welcomed by European producers after months of low European sales values and rising costs. It is expected that the positive price dynamics will continue in the first half of 2021.


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