An overall decrease in production is expected this year compared to 2022 in many industries using stainless steel. The construction sector is hampered by high interest rates and automotive production remains below predicted levels.
Stainless steel stocks began to decrease across Europe. However, stocks are taking longer than most distributors expect due to weak demand. Buyers are reluctant to make any long-term purchasing decisions and prefer to source materials from existing inventory whenever possible.
As a result, orders from European factories appear to be low and delivery times are short. Market participants report that both long and flat steel producers are willing to sell and prices are under intense downward pressure this month.
The average transaction value for 304 cold rolled coils in March was €2,939 per ton, a 22-month low. The equivalent price of 316 cold rolled coils remained around €720/ton lower than the alloy surcharges issued by the producers for March.
Lower prices are unlikely to lead to a significant increase in purchasing activity while maintaining high inventories, particularly hot rolled and cold rolled flats. Buyers worry that price cuts will further devalue their existing inventory.
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