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Stainless steel prices continue to struggle as we approach the final quarter of the year. Meanwhile, nickel prices float just above their 2021 average, closing August at $21,320 / mt. Both indices seem to indicate an overly-cautious marketplace, with buyers and sellers seemingly waiting to see what the other will do.
This sort of “commodity” standoff is less than ideal. MetalMiner has recommended that buyers of flat-rolled stainless expect lower transaction prices as we move into autumn. After all, alloy surcharges are low, and competition between service centers is higher. In fact, many U.S. flat-rolled mills have no customers on allocation, thanks to imports affecting overall supply.
Still, the battle between supply and demand is a never-ending one. And in a tight market full of people looking to maximize their dollar, anything can happen.
What would happen if the stainless steel market suddenly lost millions of tons of production? We won’t have to wait long to find out the answer because it’s already happening. As August ended, more and more reports came in detailing European stainless steel producers having to scale back or shut down production altogether.
Of course, Europe faces a catastrophic energy crisis. While many economists remain focused on the coming winter, Putin’s retaliatory gas cutoff has done plenty of damage already. So far, around three million tons of Europe’s stainless steel capacity is at risk. With energy costs surging, many plants simply can’t afford to “keep the lights on,” so to speak.
Earlier in August, the Belgian Aperam Mill shut down its mill in Genk. Soon after, they reduced production at their Chatelet Mill. More recently, Spanish company Acrinox announced it would cut production and place around 85% of its employees on short-time work. Obviously, all eyes are now on other major European producers, many of whom have just as much incentive to cut and run.
