Stainless steel purchasing activity remained at a fairly high level during the first quarter of 2020, as customers continued work on ongoing projects, or took delivery of material from existing contracts. In addition, many buyers sourced additional tonnages, as insurance against possible future shortages, should supply be disrupted due to the Covid-19 crisis. Since late March, however, business volumes have dropped.
Investment in the energy sector was already declining, as a result of the price war between several leading oil-producing countries. This was compounded when the coronavirus severely reduced the fuel demand, for cargo and passenger transport.
The automotive sector, too, was at a low ebb, before the pandemic took hold. Now, companies and individuals are reluctant to make such expensive purchases, at a time of financial uncertainty. The same is true, to some extent, of the weakened demand for white goods and other consumer items.
Sales of catering equipment have slumped, as leisure venues around the world were forced to close. While many construction projects have been able to continue, the number of new investments is declining, due to the fragile economic situation.
Many countries are, now, easing lockdown measures and enabling manufacturers to restart their operations. However, depressed end-user demand will keep stainless steel orders at a low level, in the coming months. The climb back towards previous consumption volumes is likely to be long and slow.
Source: MEPS International Ltd.