European finished stainless steel prices stabilised over the past two weeks on projected supply tightness following Spanish stainless steel producer Acerinox's decision to curtail production at its Acerinox Europa plant in Los Barrios, Cadiz, Spain, alongside a maintenance-related stoppage at Finnish producer Outokumpu. Trading companies surveyed by Argus said prices were in a downward trajectory in the first week of October, but were no longer falling and even heard to be marginally increasing in Germany on better demand prospects.
The Argus assessment for stainless steel 304 cold-rolled 2mm sheet delivered northwest Europe (NWE) for October fell by €150/t on the month to €2,700-2,750/t. Prices were declining sharply from this level at the beginning of this month but have since settled back close to this range, trading companies said. Demand remains low in most regions, with few transactions having been reported over the past week, but an unexpected uptick in interest from buyers in Germany has driven a small price increase in the country.
This support is expected to be temporary as the market prepares for a challenging final quarter. Trading firms said service centres are postponing purchases until next year, except for small pockets of demand.
In raw materials, stainless steel scrap prices saw a surprise increase last week because of mounting export interest despite low domestic steelmaker demand. The Argus assessment for stainless steel scrap 304 (18-8) solids cif Rotterdam rose by 4.72pc week on the week to €1,210-1,230/t, with the corresponding assessment for 316 scrap rising by 4.5pc to €2,200-2,240/t. Early indications this week indicate prices are expected to fall back to the level of two weeks ago, as mills continue to pile the pressure on sellers.
Demand for ferro-alloys from the steel industry has been tepid in recent weeks, with most steel companies relying on their existing term contracts. Market participants told Argus that high ferro-molybdenum prices, supported by rising material costs and greater demand from Asia, are putting pressure on European steelmakers. Producers have been trying to maximise their production by focusing on lower-margin steels, but this strategy can lead to shrinking profitability, a trading firm said.
Few enquiries for ferro-molybdenum truckloads have been made this month, with delivery delays having been reported at German and Italian plants. Despite the low demand, ferro-molybdenum prices have held relatively steady, averaging $51.10/kg over the past month.
An increase in Indian ferro-chrome exports to Europe over the first six months of this year led to excess supply on mainland Europe, pushing down prices in the early autumn to the benefit of European steel mills. Indian ferro-alloy sellers moved aggressively to gain market share and offered material at low levels in September. Sellers, seeking to move material out of European warehouses, have shown themselves to be willing to conclude transactions with slim margins to shed stock.
Prices of high-carbon ferro-chrome 65pc Cr fell by 8pc over the course of September, with further declines having been registered since the beginning of October as Kazakh and Indian producers slashed offers. The majority of long-term contracts for next year will be concluded in the coming weeks, at which point many market participants expect ferro-chrome prices to rebound. Argus assessed high-carbon ferro-chrome 65pc Cr at $1.30-1.50/lb ddp NWE on 17 October, down by 15pc from $1.60-1.70/lb ddp on 3 September.
The wider demand outlook for stainless steel raw material prices remains pessimistic for the rest of this year. "We might see steel plants closing down for the winter period sooner and come back to production later due to low order books," a European ferro-alloy trading firm told Argus.
