North American Stainless (NAS) has withdrawn its force majeure statement from last week. But does this change anything in the overall situation on the North American stainless steel market? In the EU, scrap prices for 316 grade continue to rise significantly. And Europeans continue to be plagued by metal supply fears.
US: NAS revokes force majeure – but does it change anything?
As we reported, the largest US stainless steel producer North American Stainless (NAS), which is part of the European Acerinox Group, had to stop production in at least one plant last week due to a lack of industrial gases and had to declare force majeure.
According to market participants, NAS recalled the force majeure notification in a customer letter on July 12,2021.
Does this change anything in the US stainless steel situation?
For now, even a recall changes little about the overall situation in the North American market with regard to the tight availability of stainless steel. While it is rumored that the production shutdown at NAS will only have a two-week delay impact – we think this is a very optimistic estimate.
If NAS can’t get industrial gases, what other U.S. stainless steel producers might be affected? A tight supply situation and too few truck drivers are not overnight fixes.
316 EU scrap prices continue to rise due to lack of availability
Alloy surcharges of European stainless steel producers had already increased significantly again for 316 grades at the beginning of July 2021. In some cases by up to 10%. Now comes the next news that Austenitic Steel Scrap prices in Europe continue to rise. In the last week by more than 70 euros per ton.
Austenitic Steel Scrap in scarce supply
Background for the price increase is the high demand of EU steel producers for 316 scrap, the scarce to non-existent availability of the product on the market and the sharp increase in molybdenum prices.
Europeans with supply concerns for metals
Demand for metals, such as ferrochrome and manganese, in the EU remain high. As a result, negotiations for fourth-quarter contracts have started much earlier than in recent years. This is reported by argusmedia.com in a recent article.
We had also already advised not to hope for a possible summer break in 2021. As this is very likely to fail this year.
Supply-demand situation shows no short-term relief
The supply-demand situation shows little sign of easing in the short term. Regional stocks of bulk alloys and manganese flake are running low and delays in global shipments continue to be problematic. Consumption remains fairly stable as consumers call their contract volumes as planned.
One market participant’s statement sums up the complete problem:
“People are caught in the middle. No one would want to buy when prices are high and maybe at the top of the curve, but they also do not want to get stuck without material later in the year.”
Continuous purchasing helps parry price peaks
Thorsten Gerber, CEO of Gerber Group commented today: “We therefore recommend continuous buying, as this is the most likely way to parry spikes in price. Therefore, let’s talk today.”
- Stainless Espresso: China stopped production of major steel mills
- Stainless Espresso: Who will buy Acciai Speciali Terni (AST)?
- Stainless Espresso: EC again admits errors in Safeguard extension
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.