Shortages of key stainless steel and aluminum products continue. In the United States, despite capacity increases, there is no sign of any easing on the steel market. In China, aluminum smelters are having to cut capacities by an estimated 750,000 MT due to energy cuts. And in Europe, steel prices continue to rise, while Germany is running out of steel.
Facts and figures: Nickel and the stainless steel
Having followed the general decline in base metal prices in recent days, nickel is at around $17,430 per MT on the LME and around $19,870 per MT on the SHFE this morning.
There is no discernible impact on Asian stainless steel prices, barring a twitch up or down of $25 per ton at most.
US: Steel prices continue to rise despite output increase
US steel production has maintained or even exceeded 80% utilization in the last three weeks. This means that steel production was at or even above the pre-Covid level. This is shown by the latest data from the American Iron and Steel Institute (AISI).
However, despite the increase in output, steel prices have remained at a high level and have even risen by a further 2% in the last three weeks.
Carmakers could take steel shortage to extreme
However, the shortage in the US market could still continue, as many carmakers currently have little or no production capacity, as there are still not enough semi-conductor chips for cars. Should this change, automakers will produce at full speed and finally sweep the steel market dry.
China: Aluminum production suffers from energy cuts
Due to acute drought in the Chinese province of Yunnan, the provincial government there has cut energy supplies to the numerous aluminum producers. As a result, several hundred thousand tons of aluminum cannot be smelted.
Relief only from August 2021?
It is assumed that full production will not be possible again until the end of July, probably not even until August. This is likely to reduce availability on the aluminum market by at least 750,000 MT.
EU: Germany running out of steel
According to market sources, the steel shortage in Germany has now become so extreme that there are in some cases considerable delivery delays and hold-ups. One source said that delays could be as long as 15 weeks. There is now even a threat of production lines shutdowns in the automotive industry, which, as in the United States, has already been struggling with a shortage of chips for months.
Extension of EU Safeguard likely to further aggravate situation
In view of a planned extension of Safeguard by the EU, this is grist to the mill of those who had urgently advised the European Commission to end Safeguard.
UN: Trade war costs global value chains 3-5 years of growth
A recent United Nations report concludes that the raging trade war has cost global growth 3 to 5 years so far, and international trade barriers have been a major contributor.
- Stainless Espresso: Base metals down, steel prices unimpressed
- Stainless Espresso: EU must correct Safeguard mistake
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