For the Quarter Ending September 2023
North America
Stainless Steel flat prices in the US spot market are on a decline due to several factors. Firstly, rising federal interest rates and decreased demand from the automotive industry have impacted the market. Tough competition from Chinese automakers like BYD, SAIC, and Geely Motors, who offer similar products at lower prices, has pressured local manufacturers to reduce prices and offer discounts. Furthermore, an abundance of feedstock like Nickel and pig iron in local warehouses, partly due to increased mining rates, has been influenced by automotive companies seeking stable raw material supplies. The construction sector has suffered from reduced building permits, and in Europe, rising interest rates have made buyers more cautious. The energy sector has seen reduced demand due to a decrease in oil and gas availability, Russian sanctions, and OPEC supply restrictions. The UAW strike has impacted major automotive companies, while the US Federal Reserve's decision to maintain current interest rates has added to buyer caution. The Philippines is also investing in nickel processing plants. In summary, lower demand, supply factors, and economic uncertainties have contributed to the drop in Stainless Steel flat prices in the US spot market.
Asia-Pacific
In Q3 2023, China's Stainless Steel Flat prices increased due to various supply and demand factors. Tsingshan Group's commercial nickel production in Indonesia and Zhejiang Huayou Cobalt Co.'s subsidiary becoming a global nickel supplier bolstered the availability of this critical raw material. Stainless Steel Flat production also rose due to collaborations between Huzhou Jiuli Stainless Steel Material Co., Ltd., and Zhejiang JIULI Hi-tech Metals Co., Ltd. The supply of raw materials, including nickel, surged from local and foreign sources, while falling prices of upstream steel and pig iron increased inventory levels, driving Stainless Steel Flat prices down. Although domestic demand from sectors like construction and automotive remained stable, foreign industries showed caution due to uncertain economic conditions. This led to a balanced supply and tepid foreign demand, resulting in mixed market sentiment among local consumers and necessitating price stability by manufacturers in the Chinese spot market. Overall, Q3 2023 witnessed a declining trend in China's Stainless Steel Flat market due to ample supply, subdued foreign demand, and stable local demand.
Europe
At the beginning of the third quarter, the stainless-steel flat market in Germany experienced a downturn. This was primarily due to a combination of reduced demand in downstream industries and higher inventories. The downstream auto sector faced intense competition from foreign companies like Tesla, which hindered its growth. Despite efforts to boost the electric vehicle segment and increase profits, the auto industry struggled to catch up. Both domestic and foreign buyers adopted a cautious approach, waiting for prices to decrease further before making bulk orders. To cope with the challenging market conditions, factories had to offer discounts even on small orders. High inventory levels persisted in the German spot market, primarily driven by weak consumption in various downstream sectors such as auto parts, construction, and interior design. On the supply side, production stabilized as consumption waned in the downstream automotive industry, resulting in a slight increase in supply. Inventory levels remained high due to decreased usage. Ultimately, the strong competition from foreign manufacturers, notably Tesla, continued to impact demand for flat stainless steel in the German market, contributing to the overall firm rising trend observed in the third quarter.
For the Quarter Ending June 2023
North America
The US Stainless Steel Flat Sheet had an early boost in the second quarter of 2023 before beginning to decline in the second half of the quarter. The cost support to produce Stainless-Steel Flat was supplied in April by the rise in the price of nickel feedstock on the international market. Because of the strong domestic downstream demand, the consumption rate remained on the higher end. Due to rising market demand, the service industry saw tremendous expansion and was able to offer services at higher offer rates. Due to robust consumer spending at the beginning of the quarter, which indicated a strong economic start for the second quarter, the consumer price index was on the rise. Because of the debt crisis and the growing rate of inflation, prices decreased somewhat significantly in the H2 of the second quarter. The formerly steady US economic system collapsed, and the market environment turned gloomy. Consumer purchasing power was lowered because of the interest rate increase, increased living expenses, and diminishing household savings, which resulted in a decline in demand for Stainless Steel Flat Sheets on the US spot market. The agreement made by the US government prolonged the debt for two more years, which led to the stability of US economic circumstances and a rise in the price of the Stainless-Steel Flat Sheet in June. At the conclusion of the second quarter, the US government's numerous projects raised downstream demand for Stainless Steel Flats.
Asia-Pacific
At the start of the second quarter, the price of Stainless-Steel Flat sheets in China was originally rising. However, during May and June, the price fell steadily. As the price of nickel, the feedstock increased in April, Stainless Steel Flat Sheet manufacturing costs were strongly supported on the Chinese spot market. The downstream demand from both domestic and international industries was at an all-time high. April's price increase was due to a controlled shipment by the suppliers towards the end of the second quarter. The price of Stainless-Steel Flat fell on the Chinese spot market because of an increase in supply and weak downstream demand. The offshore Indonesian mines' improved extraction and production rates resulted in an increase in the availability of nickel feedstock. Due to the quantity of pig iron and iron ore raw materials on the global market and their lower cost, Chinese Stainless Steel Flat producers purchased a significant volume of Indonesian Nickel Pig Iron. The Chinese Dragon Boat Festival and rising demand for the metal from downstream industries increased production rates in the local Chinese mills as POSCO, a significant stainless-steel maker, raised its output in the quarter to end.
Europe
Prices for German Stainless Steel Flat Sheets originally increased before falling sharply in the second quarter of 2023. The higher price of nickel as a feedstock in April contributed to substantial cost support to produce Stainless-Steel flats in German mills. The local downstream auto industry saw a rise in demand because of the strong sales of electric vehicles. As a result, the Stainless-Steel Flat price in the German spot market remained high in April. Inflation increased, and the world economy deteriorated in the second part of the quarter, discouraging buyers from entering the market. Due to a decrease in downstream demand and a corresponding decrease in the price of Stainless-Steel Flat, the output rate from the nearby mills rose. Chinese producers in other countries were selling Stainless Steel Flat Sheets in excess quantities for less money, which placed downward pressure on German-made Stainless-Steel Flats in both the domestic and international markets. In order to maintain the competitive global market environment, the mills were compelled to sell at a cheaper price.
Stainless Steel (Flat) prices in the US market remained stable in Q1 2023 due to steady demand from the construction industry, despite the financial turmoil in the US banking industry. Mill margins were under pressure due to rising input costs and the use of more scrap in furnaces. Stainless steel inventories were slow to deplete despite a significant drop in imports, and cautious buyers kept mills open to individual, non-contract negotiations. Multiple buyers were going through order books to decide how to approach buying over the next few months, as many were concerned that pricing could peak and fall off in the late second quarter and the second half of the year. As a result, SS 304 HR Plate prices for Ex Texas settled at USD 3990/MT.
In the Chinese market, the Stainless Steel (Flat) prices were bearish due to high inventory levels and subdued downstream construction demand. Stainless steel manufacturers issued limited goods last quarter, and this quarter's supply release is expected to be sparse. Despite post-holiday optimism, some large stainless-steel mills scheduled production with caution due to scarce raw materials. Spot transactions were slow, and overseas demand was weak. Although prices fell slightly in March, they remained higher than spot transaction prices, and the majority of buyers were waiting for further price drops. Increased production has also dampened demand, and March was a challenging month for sellers. However, price recovery is expected after the second week of April.
In Q1 of 2023, the Stainless Steel (Flat) prices in the German market showed a stagnant price trend due to limited supply and firm downstream inquiries. Spot supply of raw material pure nickel from the overseas market was limited, leading to subdued upstream demand for coil and downstream demand for tube and sheet in northern and southern Europe. European mills' attempts to increase flat prices mostly failed, with most countries showing stable values compared to January, May, and June lead times being quoted. Some market players saw normal consumption returning following the post-pandemic rush, while others considered keeping prices stable a significant achievement and believed that the flats market would not absorb any hikes. Downstream demand was sluggish, with falling prices observed. Mills, service centers, and re-rollers predicted a negative April due to low consumption during the seasonally short month of Easter.
