BIR World Mirror on Stainless Steel & Special Alloys - Issue February 2016

Probably no stability without deep production cuts

In the EU, 2016 began with anticipated order intakes and production levels at the leading stainless steel flat producers. Furthermore, the officially-reported financial results for the fourth quarter of 2015 confirmed their efforts to remain competitive in a challenging market, with their full focus on further cost-cutting.

The entire stainless steel value chain is suffering from continuous, long-lasting and significant price erosion among all key raw materials - with multiple effects. Stainless steel scrap is in short supply as availability is a function of underlying raw material prices. This trend will be halted solely by a market with rising prices, at least for the intrinsic nickel.

At current price levels, stainless producers increased their primary raw material intake but, unfortunately, price reactions did not occur. It will most probably need significant production cuts in the raw material sector over the short and medium term to bring stability to the situation.

Joost  van Kleef (Oryx Stainless B.V.),
Chairman of the BIR Stainless Steel & Special Alloys Committee

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