Global stainless steel markets are being reshaped by the effects of the Covid-19 pandemic. As the situation develops, some suppliers are shutting down, or reducing output, due to a lack of downstream demand. Others are having production suspended by the actions of their respective governments, to combat the spread of the virus.
In certain regions, markets are becoming more localised, as conditions vary, according to the severity of the outbreak, and the consequent actions of individual national authorities. In Europe, for example, Outokumpu’s mills are reported to be heavily loaded, providing material to customers in the north of the continent. In many cases, this replaces supplies that are no longer available from Italy and Spain, where operations have been suspended, by government decree.
Western buyers eye Asian supply
The progress of the coronavirus and its effect on stainless steel markets are more advanced, in the Far East. Inventory levels are high, in China, where production continued at a good rate, in recent months, relative to consumption. Oversupply persists, in Asian markets, where end-user demand was less severely affected by the pandemic than in many western countries. Output, in the region, is now picking up, as restrictions are, gradually, lifted.
This material may replace supply in parts of the world where production is, currently, depleted. Individual buyers – in the United States and the European Union, for example – have expressed a desire for trade measures to be loosened, to increase the availability of supplies from other countries.
Such a quirk of timing may have longer-term effects on the world stainless steel market. If Asian producers gain a stronger foothold in the European and North American markets, buyers may become accustomed to the abundant, low-priced material. Local steel mills – many of whom are already struggling – may find it difficult to regain business lost during this period.