European stainless steel mills are closing due to energy costs
Soon the battle between supply and demand for stainless steel could become very confused, due to a contrast between a drop in supply that is facing, at the same time, uncertainties on demand linked to the economic slowdown.
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. At the end of August, more news came of European stainless steel producers being forced to downsize or close production altogether.
Of course, Europe is facing a catastrophic energy crisis. While many economists focus on the coming winter, Putin's retaliation for cutting the gas has already done a lot of damage. So far, around three million tonnes of European stainless steel production capacity is at risk. As energy costs rise, many plants cannot afford to "keep the lights on", so to speak.
At the beginning of August, the Belgian Aperam Mill closed its plant in Genk. Shortly thereafter, he reduced production at the Chatelet plant. More recently, the Spanish company Acrinox announced that it plans to reduce production and to put around 85% of its employees on reduced hours. Of course, all eyes are on other major European producers, many of whom have just as much incentive to cut and run.
At the same time, stainless steel prices continue to decline as we approach the final quarter of the year. Meanwhile, nickel prices are just above the 2021 average, ending August at $ 21,320 / ton. The markets are blocked by the uncertainty linked to a world crisis linked to energy prices.
This sort of "merchandise" stalemate is certainly not ideal. MetalMiner has advised buyers of stainless flat laminates to expect lower transaction prices as autumn approaches. After all, alloy surcharges are low and competition between service centers is higher. Indeed, many US flat rolled steel mills have no assignment customers, thanks to imports that affect overall supply.
So it will be very difficult to understand the steel market in the coming months. We will have to wait and see.
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The article The European stainless steel mills are closing due to energy costs comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/le-acciaierie-di-inox-europee-stanno-chiudendo-per-i-costi-energetici/ on Sat, 03 Sep 2022 09:45:29 +0000.