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.
Which stainless steel grades are in short supply?
Stainless steel grades 304, 304L and 316, 316L seem to have been hit particularly hard. The less expensive 430 stainless steel is also becoming increasingly difficult to find. We are receiving reports from Europe and Asia that 430 will no longer be produced at all before 2022.
What is the reason for the acute global stainless steel shortage?
Markets such as China and India are currently not interested in steel and stainless steel exports because the domestic economy is running at full speed and steel can be sold there at more attractive prices. China has now become a net importer of steel. This is fueling the worldwide stainless steel shortage.
China’s aggressive production cuts, which analysts expect to take 50 to 70 million tons of steel off the market this year, will further fuel the shortage. Deutsche Bank also believes that China could completely abandon steel exports this year.
Where else in the world is steel in short supply?
In Europe and the United States, market participants are fighting for every available ton of steel. Economies that have closed their markets to imports are now facing major challenges. Some steel and stainless steel processors have already had to halt production.
Why there are growing voices for an end to market protection measures such as the Section 232 Tariffs in the USA and the EU Safeguard measures. If these measures do fall, and in Europe there is currently a growing likelihood that they will, further available capacity of steel and stainless steel will be sucked up by the hungry European market.
Where is the stainless steel shortage in the Middle East coming from?
In the Middle East, hopes of falling prices and unlimited availability have kept key market players from ordering in time. The result is that material is simply no longer available. The prospect of falling prices, which has been reported occasionally by the press, and overly hesitant purchasing could now become a pitfall for the Middle East’s rebounding economy. We had already written about this issue.
The first signs of a more serious stainless steel shortage are already there with the commodity grades 304, 316 and 430, which are hardly available any more in parts of the Gulf region.
What solutions steel buyers should implement right now
- Get into action now. Fight the stainless steel shortage today.
- Plan your requirements today until at least the end of 2021.
- Actively seek new sources of stainless steel supply now.
- Turn with confidence to steel distributors who already have a large supply network in place.
- Don’t wait for prices to fall, all current information points to further increases.
- Use the skills of our stainless steel experts in the Middle East, Gulf Region, Asia, Europe and the Americas.
You have questions about how you too can solve your procurement problems. Simply contact us. We will find solutions – also for you.
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.