Raw material costs cause stainless steel prices to rise further
Raw material costs cause stainless steel prices to rise further

30 November 2022 – The ferro-molybdenum price in particular is currently causing stainless steel prices to rise further. But nickel and scrap are also exerting significant upward pressure. EU subsidises ETS certificates with 100 billion euros. Further billions in subsidies are now to follow. Buy European? And where will the raw materials come from in future, Mr Habeck?

Rising raw material costs push stainless steel prices up further

The rise in the price of raw materials, especially nickel, is also causing stainless steel prices to rise further. Yesterday, LME nickel futures were up more than 5.7% and SHFE nickel futures were up more than 1% yesterday, followed by an increase of another 4.47% today, Wednesday. Stainless steel scrap prices are likely to respond accordingly.

Taiwanese stainless steel producers raise prices

Rising stainless steel prices are also reported from Taiwan. Among other things, the rapidly rising ferro-molybdenum price has had a significant influence. The price of ferro-molybdenum recently increased by about 13%, almost tripling since August 2020. Ferro-molybdenum is a component of the important stainless steel grades 316 and 316L. There is currently no sign of an end to the upward trend.

Free ETS certificates: EU already subsidised to the tune of 100 billion euros

According to a recent study by WWF, the European Union’s free ETS certificates have amounted to more than 100 billion euros since 2013. In some cases, the EU member states have issued CO2 certificates at a rate of up to 114%.

Germany wants to further expand ETS subsidies

The ETS subsidies are to be extended even further. EU member Germany alone has received permission from the European Commission to pump an additional 27.5 billion euros into ETS offsets by 2030.

CBAM, ETS certificates and lobbying

This seems like a mockery in view of the upcoming Carbon Border Tax (CBAM) and the lobbying of the steel producers’ associations. They will continue to receive free ETS certificates, contrary to WTO regulations, and are lobbying hard for further direct and indirect subsidies to facilitate exports. Multiple subsidies are likely to lead to massive protests from other WTO members and weaken the overall position of the European Commission and EU27 members with regard to future trade relations.

Buy European? Where should raw materials come from in the future?

Europe’s economy is not only dependent on its exports, but also significantly dependent on imports of intermediate products and raw materials. So it seems like sheer madness to embark on a “Buy European” strategy along US lines, as Federal Economics Minister Robert Habeck (Bündnis 90/Die Grünen) is pushing according to recent reports.

This shows once again that Mr. Habeck and his ministry do not think things through to the end, as they have already shown several times in the past months. Be it the announcement to turn East German oil refineries into hydrogen producers or the burst gas price levy, to name just a few examples.

Germany in particular, which has to import almost all its raw materials from abroad and has long been considered the world’s export champion, cannot afford to lose any more suppliers of raw materials.

EU colonialism can no longer be talked away

The dispute with Indonesia over the nickel export ban had already led to a fierce dispute at the WTO and does not seem to be over even with the DSB’s decision against Indonesia. The signals from Indonesia on this are very clear so far.

Morally questionable duplicity

Or the World Cup 2022 in Qatar, which has been widely criticised from Germany, shows that while people like to wield the moral cudgel, they then announce quite freshly that the first deliveries of Qatari liquefied gas are expected – the long-term supply contracts, negotiated by Federal Minister of Economics Robert Habeck, are to cover approx. 3% of German gas consumption, in future even expandable.

Thorsten Gerber, CEO Gerber Group, said today: “The appointment of Robert Habeck as Federal Minister of Economics was only good for his ego, but not for the German or European economy, especially in view of his abilities.

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