Jobs at risk: Terrible stainless steel shortage 2021 continues – Stainless Cappuccino

Back in February 2021, we took an in-depth look at the crazy stainless steel shortage in the United States and Europe. And in doing so, we also looked at the background of how the stainless steel shortage could happen.

In a nutshell, what’s the deal with this crazy stainless steel shortage right now?

Aided by the Corona pandemic, serious structural problems in the global production, supply and distribution of steel and stainless steel have been evident since November 2020. European and American steel producers no longer manage (or do not want to manage) to fully supply their markets. In addition, the USA and EU have imposed strict import restrictions which make it almost impossible for most stainless steel purchasers to reliably buy material abroad.

Result: Massive shortage of steel and stainless steel

The result is a massive shortage of steel and stainless steel in Europe and the United States. Prices are exploding. Lead times for some grades of steel have now reached December 2021. Or certain grades of stainless steel are not to be produced at all in 2021. Companies in the downstream industry will have to scale back production or shut down altogether. Hundreds of thousands of jobs are at risk of being lost.

For many purchasers and companies, the question is hardly one of price, but whether urgently needed steel or stainless steel is still available at all!

Metal processing downstream industry cries for help

Calls for an end to Safeguard measures and Section 232 tariffs are ringing loud and clear through the halls of politics. But domestic steelmakers continue to try everything they can to prevent a smooth supply of steel and stainless steel.

But instead of saving millions of jobs in the downstream industry, which has been battered by the Corona pandemic, the EU continues to give away billions in taxpayer money and subsidies to domestic steelmakers.

Steel traders try to help where they can

Brave steel traders and importers are trying to do what they can for the European and American downstream industry. That’s why they get up every day. It’s a passion to help – especially in difficult and challenging times! But they are opposed by international steel companies worth billions, which, with their powerful lobbying associations, are doing everything they can to keep the domestic industries dependent on them.

So much for the crazy situation. Yes, it reads like a thriller. But unfortunately, it is the harsh reality for many companies and their employees.

What has happened since our post from February 2021

Alloy surcharges March 2021: Rapidly rising raw material prices and shortages set the trend

Our article on alloy surcharges for March already shows where the journey is heading. Prices for raw materials and also steel and stainless steel continue to rise rapidly. Briefly, nickel rises to over $20,000 and then crashes by more than 14% due to a press release from Tsingshan. Effects on the stainless steel price are expected or feared but remain to the surprise of many market participants.

Europe: Domestic prices continue to rise due to shortage of materials

Steel prices continue to rise. Fueled by a continuing steel shortage. In addition, lead times are becoming longer and longer. European steel producers are unable or unwilling to meet demand.
Source 1 | Source 2

EUROFER predicts steel shortage and aims to keep hurting EU economy

The European metal processing industry is under siege. Steel production in Europe has been hit hard by an unprecedented shortage and 12 countries are refusing to do anything about it, despite being told repeatedly that the situation needs urgent attention. Now, EUROFER themselves say demand for steel in Europe outstrips supply – a damning indictment of their own failure as representative organization.

Source

Europe: Coil shortage, rising prices for stainless steel and HRC

The coil shortage of steel and stainless steel in Europe continues. According to media reports, delivery times from integrated steel mills, normally 6 to 12 weeks, have now reached up to 5 months. Some mills are no longer even accepting orders for the third quarter of 2021.

Source

HRC: A quick snapshot on prices, shortages and lead times

We’ve taken a quick look at the news from Europe, China and United States on hot-rolled coil (HRC) availability, shortages, lead times and prices.

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Middle East: Is the stainless steel shortage now also coming here?

In the Middle East, the first reports are arriving that certain types of raw materials can no longer be sourced or purchased locally.

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Slab shortage: Is this the origin of the flat steel crisis?

A central problem in the steel crisis appears to be the worldwide availability of steel slabs. In particular countries such as Italy and Turkey, which rely heavily on slab imports for their rolling mills, are not receiving enough material. In addition, two mammoth projects are starting up in Mexico which could remove millions more tons of available slabs from the market.

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Middle East: Risky stainless steel shortage becomes acute

As reported by our market sources in the Middle East, it has now become difficult to source commodity stainless steel grades locally. Service centers, distributors and stockholders are running out of steel. The stainless steel shortage in the Gulf region grows.

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What is the status today, April 23, 2021?

Even though China had a record month for steel production in March (Source), of course none of this will reach Europe and the USA. That’s why no help for the beleaguered downstream industry can be expected from here at the moment.

In the United States, the hot-rolled coil index is close to $1,375 per ton, setting a new price record (Source).

In Europe, ArcelorMittal significantly increases prices for HRC. This means that HRC prices are 133% higher than in May 2020. (Source).

And CIS hot-rolled coil prices hit four figures (Source).

In addition, the Worldsteel Association forecasts a 5.8% increase in steel demand in 2021 only and a further increase in demand of at least 2.7% in 2022 (Source).

What are the associations and companies in the downstream industry doing about the steel shortage?

In the United States, voices against Section 232 Tariffs are growing

The Coalition of American Metal Manufacturers and Users wrote a letter to U.S. Secretary of Commerce Gina Raimondo on March 15, 2021, providing data showing the ineffectiveness of the Trump administration’s Section 232 Tariffs on steel and aluminum imports.

Source: tariffsaretaxes.org

Gerber Steel GmbH urges end to EU Safeguard measures

Thorsten Gerber, CEO of Gerber Steel GmbH, an international stainless steel trader based in Germany, wrote a letter to the EU Commission and Vice-President Dombrovskis on Friday. In it, Thorsten Gerber urges that the safeguard measures be terminated.

EURANIMI has given us an interview on the Safeguard topic

“What are the key issues currently affecting stainless steel importers and their customers in Europe?” we asked. Christophe Lagrange, an executive board member of European association EURANIMI responded in an interesting interview.

German Industrieverband Blechumformung calls Safeguards unnecessary

The feared flood of imports is absent, import quotas are falling, global steel capacities are manageable. There is no danger for the EU steel industry – in fact, it is benefiting from the steel shortage. Nevertheless, the EU Commission is reviewing whether the steel industry could use a warming winter coat in the form of safeguards in the summer.

This would mean a major freeze for steel processing industries with 3.5 million jobs: They are already short of starting material, prices are skyrocketing, production stops are threatening. And safeguards are putting a stop to mitigating steel imports from third countries.

In a statement to the EU Commission, the German Sheet Metal Forming Association (IBU) and the Fachvereinigung Kaltwalzwerke (FVK) are therefore protesting strongly against a possible extension.

Source: industrieverband-blechumformung.de

U.S. steel manufacturers call for an end to 232 tariffs

“The metals industry got their time to reset; now it’s time to boost the domestic manufacturing industry,” Dan Davis of The Fabricator writes that.

Clear demand: Section 232 tariffs must end

What goes up must come down? That’s inevitable. Unfortunately, when it comes to steel prices, you can’t rely on any laws of nature to determine when prices might return to the historic levels of recent years. That’s why the Section 232 tariffs have to go.

Source: thefabricator.com

And this is only an excerpt of what is currently being done to combat the seemingly overpowering blockade of steel and aluminum imports by European and U.S. steel and aluminum producers, which often belong to the same corporations, especially in the steel industry.

Become active – talk to us – so that we can help you!

We will continue to keep an eye on this issue for you and actively fight and work to end this stainless steel shortage. Support us in this. Talk to us. Give us a call. Write us emails. Point out problems to us. We’ll drag them out into the light of day for you and point the finger.

Just send us an email at info@steelnews.biz or make an appointment for a clarifying conversation with us at +49 7642 9282851.

Gerber Group

We at the Gerber Group have been trading in stainless steel worldwide for over 20 years. We are your experts when it comes to purchasing, import, logistics and services. Information is a vital part of this. Because only then can you and we make the right decisions. Do you have any questions? Contact us now.

Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.