Quarterly Report – February 2020

2020 will be another challenging and, in fact, pioneering year for the European stainless industry.

Recent years have witnessed a continuous decline in crude stainless output among the European peer group of leading stainless steel producers. This trend has been orchestrated by a simultaneous increase in imports of both cold-rolled and hot-rolled stainless steel into the European community; the actual proportions of imports are above 30% for cold-rolled and above 50% for hot-rolled stainless steel.

In order to protect the interests of the European stainless industry by guaranteeing fair competition, the European Commission has reacted with safeguard measures and duties executed in a quota system.

However, stainless steel production in Europe will have a future only if its core raw material - stainless scrap - is available at competitive prices. The key this year will be to balance pricing and availability. A significant drop of around 15% in the Fe valuation towards the beginning of the year is causing issues, both in terms of availability and of pricing.

In addition to pricing, another factor which will play a significant role in the general importance of stainless scrap is the eco-friendly carbon footprint of this raw material.

The coronavirus is also becoming an issue and will have an impact on both raw material pricing as well as availability. This is a difficult area to forecast, but if the crisis continues it might affect our industry more strongly than currently expected.