The beginning of this year has been even worse than expected. At the time of writing the previous Mirror report, no-one could have imagined such a marked slowdown in the final quarter of last year, resulting in a complete halt to stainless steel scrap sales in December. In fact, the main Italian consumer of stainless steel scrap has totally stopped its purchases while the other players have drastically reduced them. The reasons for all this include the lower quantities sold by the mills as well as their desire to cut their significant inventories. In addition, there has been an increase in slab imports, thus reducing the need to melt scrap and ferro-alloys.
In summary, the Italian stainless steel market is facing: a steep drop in the volumes produced; the significantly increasing use of slabs from Asian markets; a significant reduction in sales prices in the face of an invasion of products from northern Europe; and continuous attempts to reduce scrap prices through the massive use of ferro-alloys, which in turn have become more competitive. As an example, ferro-chrome has witnessed a sudden price collapse, with overproduction leading to the closure of many production facilities.
Furthermore, the first quarter has brought the possibility of a recession owing to the coronavirus.
We just have to hope for the first positive effects from the European Commission’s safeguard measures which, before the virus outbreak, were seen as the only possible lifeline for a recovery in consumption and production for Europe’s stainless steel mills.
