by MEPSInternational Ltd
转载自MEPS International Ltd
In the UnitedStates, buyers of stainless steel are purchasing minimal quantities, atpresent. Companies are reluctant to commit to new forward orders because of theuncertain economic environment caused by the Covid-19 pandemic. Service centresare keen to reduce inventories, especially of high-priced material. Many aresimply looking to generate cash, as financial conditions deteriorate.
Prior to the coronavirusoutbreak, US stainless steel producers indicated that basis price rises wouldbe imminent. However, the unprecedent market conditions arising from thepandemic make reductions in discount levels unlikely, in the near term. USsteelmakers are content to maintain stable pricing, at present. Any movement inbasis values is unlikely to spur a significant increase in new forward orders.
Output cuts andlow depot stock levels should help the mills to maintain stability in basisprices over the coming months. However, any sudden surge in demand, during thisperiod, could lead to shortages in several product lines.
Far East export volumes slashed
The progress ofCovid-19 and its effect on domestic demand are more advanced, in the Far East.Local buying activity, in Asian countries, remains subdued. In addition to thechallenging home market conditions, most stainless steel producers haveexperienced a significant fall in orders from their key export destinations.Several traders comment that enquiries from the US were virtually non-existent,during the months of April and May.
Despiteproduction cuts by several Asian mills, oversupply persists. Stainless steelselling values are marginally lower than a month ago, in South Korea. Incontrast, a cost-based increase was achieved in China and Taiwan. However, withthe majority of Far East buyers adopting a ‘wait and see’ attitude, producersare focusing on securing sales, rather than passing on rising raw materialcosts.
EC mulls quota adjustments
Europeanstainless flat product transaction values decreased, in May. Several marketparticipants report that European producers are trying to restrict any furtherprice erosion, perhaps acknowledging that significant reductions are unlikelyto bolster the volume of orders, in the current climate.
Europeanstainless steelmakers are expected to maintain reduced levels of productionover the next few months, as consumers continue to purchase only for theirimmediate needs. A number of buyers confirmed that cheap deals, fromdistributors and service centres, are available in the marketplace. Manytransactions were concluded at values below current mill replacement prices.
Steelmakerassociation, Eurofer, has asked the European Commission to tighten theprevailing import safeguard measures, due to the fall in demand in the steelsector created by the coronavirus pandemic. This request has been met withmixed support, from industry participants. Consequently, European buyers arereluctant to purchase material from overseas suppliers, until an announcementhas been made. Any quota adjustments may have an impact on material previouslyordered and due to arrive after July 1.