Stainless Steel Me

Overall demand for stainless bar in Europe remains depressed. In some sectors, notably automotive, mills are not now expecting to see any significant new business until late Q3 as supply chain stocks continue to be drawn down. In other sectors business is expected to be very light for months to come.

Where customers are placing orders – and they are only buying what they really need, market sources tell Steel Business Briefing – delivery times are short. “In 8-10 weeks you can have any size you want,” one mill comments. Steel is still required for capital projects started before the downturn.

All mills are on reduced working, and although forged bar lines are said to be operating closer to normal, their delivery is also just weeks rather than months.

Oil/gas is another sector hard hit. Continuing low commodity prices make much new exploration/production uneconomic, and sales of steel for maintenance/spares is a large part of current business. Other energy applications, chemicals and the marine sector are in better shape, SBB understands, but shipbuilding may not hit the bottom until 2010. Demand from machine building continues to weaken.

European base prices remain under pressure (see table). Ferritic base prices are slightly higher at around €1.25/kg. Stock levels are highest in martensitic grades, SBB hears.

Imports from Asia, and in particular from India, continue, though views are mixed on their impact.Below is the European bright bar surcharge history from Nov 08 – Feb 09