26 Januar 2023 – At the beginning of December there were already signs of a new shortage of stainless steel from January 2023. Currently, there are many indications that the upward jump in demand is already greater than the supply. And the electric vehicle manufacturer Tesla wants to produce at least two million vehicles in 2023. According to company founder Elon Musk, demand has risen dramatically.
Stocks already empty? Stainless steel demand jumps up
As early as the beginning of December 2022, there were indications that, due to production restrictions by Asian manufacturers, the early Lunar New Year celebration in 2023 and rising alloy surcharges at European plants, a mixed situation could arise that could lead to a new shortage of stainless steel.
We recently warned against what we believe to be misleading reports, such as those circulated by MEPS and Kallanish, which suggest a quiet market and are likely to fuel uncertainty among buyers. Whether such reports are distributed consciously or unconsciously is for everyone to decide for themselves.
Very lively and hurried EU stainless steel market
However, market sources and the market itself have given us a completely different picture in the last few days. There has been a clear jump in enquiries and sales, especially for stainless steel coil and sheet.
Delivery time? Last week is best…
The earliest delivery times of the EU mills are already at the end of Q1 2023. Many Safeguard quotas are now full or overflowing. Certain stainless steel grades are currently being desperately sought by buyers. The time frames for projects and enquiries have also shortened dramatically. Delivery? Preferably already last week. The number of enquiries is now said to be significantly higher than the amount of material immediately available.
EU mills pursue tough pricing policy
It comes as no surprise that the EU factories are sticking to a hard price policy and are not very willing to make concessions to their customers. In the past weeks, prices had already risen. Last week they were also boosted by the fact that steel inventories in Germany, for example, had fallen to their lowest level in 16 months in January 2023.
Asians have announced price hikes after Lunar New Year
The Lunar New Year celebration is doing the rest, because answers to enquiries from Asia are not forthcoming at the moment and the significant rise in raw material costs had already prompted stainless steel producers, e.g. in Taiwan, to point to imminent price increases before the start of the celebrations.
Rising demand meets emptying stocks
The spot supply of flat-rolled stainless steel products is likely to run out quickly in this lively environment and delivery times have already lengthened considerably. Short-term buyers at service centres and distributors can now grab a bargain or two before the Asians storm back into the market. It’s good if there are still suppliers who can offer them.
Tesla with record sales in Q4, demand jumps upwards
Tesla has posted a 128% jump in profits year-on-year in 2022, according to group figures. And made a record $24.3bn in revenue in the fourth quarter of 2022. Company founder Elon Musk’s announcement of plans to sell more than 2 million vehicles in 2023 has given Tesla’s stock a decent boost not only in the United States but also in Europe.
Most recently, Tesla had reduced the prices of its vehicles in China, the USA and Europe, in some cases significantly. According to Musk, the price reduction is said to have led to an immense increase in demand.
The increasing demand for electric vehicles in 2023 should also lead to an increase in demand for nickel products. Other companies from the EV downstream industry had recently reported that they had concluded important contracts or deals regarding the procurement of nickel products, e.g. from Indonesia.
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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.
