Markets begin to pick up for European Stainless Coil

Wed 20 Aug 2008

The European stainless coil market, though quiet, is beginning to come to life as northern countries return to work after the summer holiday season. However, vacations remain in full swing further south, so while contract shipments continue at a seasonally adjusted pace, any regional recovery in spot sales is modest and patchy.

Some sources say distributors are now thinking of resuming buying shortly, or already are buying. Stock levels have been declining through the summer months Steel Business Briefing understands, as nickel’s price drifted downwards before oscillating around the $18,000/tonne mark in past weeks with no clear sign yet as to whether it is set to rise, fall or stabilise in the medium term.

In these circumstances, with marginally weaker austenitic base prices and September’s alloy surcharge looking likely to decline, buying activity is unlikely to surge. Clearly some distributor stock will have to be replenished to meet customer needs, so some uptick in buying activity in September is expected, mill sources tell SBB. When more metal is needed, mill deliveries are currently early- to mid-October for mainstream grades.

Asian coil imports continue, but generally, European sources do not seem to regard them as significant.

Most in the sector are waiting to see how the overall economic picture unfolds in the coming months, with consumer sectors seen as the most vulnerable to economic weakness, and energy related uses the least vulnerable.

Source SteelBB.com

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