The European stainless flat steel market is experiencing a slow recovery this year, stainless steel processors and service centres tell Kallanish.

EU coil producers are increasing their prices by €20-30/tonne ($20.8-31.2/t) for March delivery. This, however, will face resistance from buyers because of the challenges in transferring the increases downstream. Certain mills are currently quoting lead times for March, while others continue to fill February order books. This year, there has been some increase in orders for sheets, a source in Italy reports. He indicates a lead time for sheets extending to the end of March. Orders for tubes, however, continue to show subdued demand.

Several coil buyers have voiced their apprehensions regarding the 8% duties they will be required to pay for coils imported from Indonesia. Prevailing sentiment among buyers discourages taking part in the import market. In northern and western Europe, stainless cold rolled coil for February delivery is at €2,450-2,460/t delivered. The market price for Italian stainless CRC stands at €2,400/t delivered. Stainless hot rolled coil in Europe, including Italy, is ranging between €2,150-2,200/t delivered.

Distribution prices are experiencing persistent downward pressure, reflecting trends observed in the fourth quarter. Distributors and service centres tell Kallanish they are struggling to implement price increases, leading to significant negative financial impacts. Flat product stocks in northern and central Europe are currently assessed as moderately low, while those in Italy are said to be higher. Current pricing for sheets in Europe is reported to average €2,550-2,600/t delivered, with Italy slightly lower at €2,500/t, according to sources. Current scrap prices are not supporting finished products. The European stainless scrap market is marked by a lack of significant activity. Scrap demand from mills in Europe is subdued, largely due to their continued procurement of cheaper slab and nickel pig iron from Asia. Steel producers are anticipated to continue sourcing these materials, whereas demand for scrap is expected to remain weak in the coming months.

“The significant contraction observed in purchasing activity aligns with the overall performance of the European industrial sector... Many believe that the current persisting demand weakness is likely to continue throughout the entire first quarter," Italian trade association Assofermet says in a market note seen by Kallanish. This year, the market will face challenges due to rising energy costs, potentially resulting in price hikes as companies strive to restore their margins.