Unsettled times on the steel market or just the usual market movements? Let’s take a look at this today. And reveal our opinions and comments on some currently important topics.

A short opinion: What is happening in the steel market right now?
After nickel was able to hold its level above $18,000 per ton over the past few days, it surprisingly slumped on Jan. 27 and is currently trading at around $17,600 per ton on the London Metal Exchange.
The euro has weakened against the dollar, which analysts attribute to speculation by the central bank.
In addition, reports are circulating that the price of scrap has collapsed and that iron ore will also fall. This is contrasted by rising prices for chrome and manganese ores.
The reports from China are rather opaque before the upcoming Chinese New Year and bring additional confusion into the market. Here, jumping prices in stainless steel futures have been reported recently. And local stainless steel prices are also picking up in China.
Where is the steel trend heading: short setback or trend reversal?
The nickel price trend
Looking at the news of the last few days, the first thing that stands out is the confirmation of POTUS Joe Biden’s new Commerce Secretary Gina Raimondo (Source). In her inaugural speech, she announced a crackdown on cheap Chinese imports of aluminum and steel and called for fair competition. A few days ago, the nickel price had risen by 3% in response to Biden’s Stimulus Speech (Source).
Experience shows that such announcements always have an impact on the steel market, even if nothing has happened yet apart from words. We therefore see the cause of the slump in the nickel price once as a reaction to this speech and as short-term profit-taking by speculators. Indeed, little has changed in the overall demand for stainless steel, which remains high.
The euro-dollar exchange rate
Investors are selling the euro (EUR) due to economic jitters in the euro zone, which caused the euro/US dollar (EUR/USD) exchange rate to slump slightly. After market participants and analysts expected that the European Central Bank (ECB) would not change course in monetary policy (Source).
Are scrap prices taking a nosedive?
It is reported from several countries that scrap prices would soften (Source). In turn, more and more blast furnaces and steel mills are being restarted around the world (Source). According to sources, in some places steel scrap is no longer available at all. In addition, the Chinese government lifted the ban on metal scrap imports in early 2021 (Source). The steel market reports that Chinese scrap buyers are already going on a buying spree in the United States (Source). And in the European Union, a ban on metal scrap exports (Source) has been loudly considered since 2020.
Due to the Corona pandemic and the accompanying and painful logistical problems, inventories for raw materials are likely to be low overall worldwide.
Here, the price should recover soon due to high demand.
The upcoming Chinese New Year
Just before the Chinese New Year, downstream demand traditionally declines in China. Which initially has an impact on the local steel market. In the near future, however, industrial life in China will come to an almost complete standstill for several weeks. And this will have an international impact on availability and prices for steel and stainless steel.
Delivery times and logistics
There is still a Covid19 problem in the supply chain that should not be underestimated. Sea freight containers are stranded in the wrong corners of the world and are slow to get back to where they need to be.
Delivery times for local U.S. steelmakers are 9 to 10 weeks (Source). European steelmakers are struggling with capacity issues and some already have delivery times into the summer or early fall of 2021 (Source). Or have been completely overbooked since fall 2020 and cannot fulfill their orders.
Our opinion
The current developments are a short setback on the steel market, but not a real trend reversal. Covid19 and the pandemic will still have a significant impact on the (stainless) steel market in 2021. Stay awake and alert. And weigh well possible opportunity costs. Taiwanese sources report that stainless steel prices for February are already being increased by mills (Source).

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.