November 14, 2024 Palle Thomassen, Jan Knaak
Market Trends for Stainless Steel – November
Welcome to the latest market insights from Damstahl, where we delve into the dynamic world of stainless-steel trends. You’ll get a closer look at current market developments and updates on price trends, energy and transportation situations, as well as the availability of different product groups.
General Market Trend
As 2024 comes to an end, it has undoubtedly been a challenging year for the stainless-steel industry. Demand, particularly in Germany, has been low, affecting the entire European market. Prices have also been under pressure for most of the year. Economists expect overall growth for Europe to be 1.3% next year, with Germany growing by a maximum of 1.0%.
With Donald Trump returning as U.S. President and prioritizing the USA, the implications for the global economy, especially Europe, are uncertain. The ongoing conflicts in Ukraine and the Middle East add to this uncertainty. While we can only speculate on these political developments, our focus remains on our core business: stainless steel. Notably, when Section 232 was imposed by Trump in March 2018, the nickel price increased by more than 10% in 1.5 months.
Raw Materials
Nickel (LME 3 Month)
In August, we reported a value of $16,400/ton for nickel, which remains roughly the same today. Although there were upward trends in October, prices have since fallen below $16,000/ton. Predicting nickel prices is challenging due to varying information. Price increases could be supported by Indonesia’s strategy to enhance its value chain by refining raw materials domestically. China could also drive prices up if the government stimulates the economy. However, ongoing oversupply, which may worsen in 2025 with increased mining quotas in Indonesia, could counteract price rises.
Chromium
The future pricing mechanism for chromium remains unclear. We have lacked benchmark pricing for nearly five months, but this has not significantly impacted alloy surcharges. Most mills currently use daily prices for chromium, making outlooks difficult. Chromium’s development mirrors that of nickel.
Ferromolybdenum
Ferromolybdenum has performed well throughout 2024, maintaining high price levels around $50,000/ton. This stability may be due to increased demand for stabilized grades in developing countries. No significant changes are expected for 2025.
Aluminium and Copper
Both aluminium and copper prices are higher than they were during the summer. These prices are influenced by the economic aid package announced by the Chinese government to boost the Chinese economy. The economies of several European countries are under pressure. Germany’s car industry is in focus, but growth in countries such as Italy and Spain is also under pressure.
Aluminium
Aluminium prices remain high, but there is great uncertainty in the market. Activity in the mills is unstable, and prices are mainly supported by an unstable supply of raw aluminium.
Copper
The copper price was expected to rise towards USD10,000. However, the economic aid package could not sustain the prices. Copper trades at the beginning of November at USD 9,500.
Energy Costs
Energy costs are not currently a major driver of price increases in stainless steel or the general market. The EU has maintained high stocks of natural gas, and with a mild winter like 2024, prices are unlikely to rise significantly above the current €35-40/MWh. However, the Middle East conflict poses a risk that could drive prices higher if it escalates.
Freight Situation
Sea
The SCFI price index to Europe has been rising for the past two weeks. The industry is trying to regain control by regulating demand through blank sailings, resulting in higher freight costs and longer times from booking to confirmed schedules. With high-level planning and realistic forecasts from our dedicated purchase team, we can still navigate this situation to secure materials for our valuable customers.
Road
The industry is in its peak season, with Black Friday and Singles’ Day soon affecting capacity in Europe. Oil surcharges remain low compared to the beginning of the year. We are awaiting more information on the cost impact of the Danish Road Tax starting January 1st.
Scrap
Carbon steel scrap prices have only shown little momentum in 2024, balancing between $360-410/ton. While “green steel” projects have had minimal impact this year, scrap remains crucial for the stainless-steel industry’s green agenda. We expect scrap prices to rise moderately in 2025.
News on Products
Bars
There are no major updates on the supply situation for bars. European partners report short delivery times and stable base prices due to low market demand. Indian partners have also maintained stable prices throughout the year. We expect current price levels to remain stable within a small range.
Tubes (Seamless)
The supply situation for seamless tubes remains stable, with short delivery times from European producers and stable 6–8-month delivery times from India. Prices are expected to remain stable in the coming months.
Tubes (Welded)
European tube mills are nearing a turning point, with prices expected to have bottomed out. Mills are likely to increase prices due to rising production costs and anticipated higher coil costs. Tube and pipe producers have been operating at a loss for several months, which is unsustainable. Mill stocks are sufficient for daily demand, with project orders supplied within 8-12 weeks. Activity in Asia remains moderate, and the uncertainty surrounding potential new trade restrictions led by Trump is intact.
Sheets & Plates
Demand for flat products in Europe was relatively stable in the first half of the year, followed by a decrease at the end of Q3 and a moderate uptick at the beginning of Q4. Seasonal activity is typical as stockists and service centers reduce stock levels for the fiscal year-end, while some mills temporarily halt melting operations. The expected supply and demand pattern suggests longer lead times and moderately increasing prices by early 2025. Asian imports have increased due to weaker domestic demand, but potential EU trade restrictions may reduce buying activity from this region.
Fittings and Flanges
When looking at our product program, we have a steady supply of our full range of both fittings and flanges in 4307, 4541, 4404, and 4571. Some suppliers have longer delivery times, while others have shorter ones. Despite the current situation, we can meet market demands and keep items in our warehouse. The same goes for price levels, with small increases on some products and decreases on others. Over the last couple of months, decreasing prices have not significantly affected fittings and flanges, as prices did not rise during the small peak we had in the summer. To sum up, we see steady prices and delivery times.
Price Development and Conclusion
As mentioned in our introduction, 2024 has been very challenging, and the signals for 2025 indicate that we could face another challenging market situation next year. Despite this, prices remained stable throughout the year, and stability is also expected for 2025. We are currently finalizing our budget for 2025, which is based on roughly the same price level as now. The stainless-steel industry will become more important in the green transition, particularly with a lifecycle approach to scrap. However, many unknowns are coming from the U.S., China, the Middle East, and Europe, as Germany’s economy is a main driver for the whole continent.
We’ll return with new market trends early in 2025 and wish you all a successful end to 2024 and a good start to 2025!
Want to know more?
Palle Thomassen
Purchasing Director, Nordic
path@damstahl.com
+45 8794 4057
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