European Stainless-Steel HR Coil continues to decline in February Amidst Lowering Downstream Demand

By the end of February 2024, the price of Stainless-Steel HR Coil remain on a lowering edge as the consumption from the downstream construction sector persists in a plunging trend. The production of Stainless-Steel HR Coil has been on an uncertain trail as the annual report of the major producer in Europe such as Outokumpu, had observed a mixed sentiment of resilience and challenges amid a persisting harsh market environment. Meanwhile, the strikes carried out at several Stainless-Steel plants across Europe have played a major role in creating hindrances in the European Spot market. Meanwhile, the downstream construction and residential sectors have been anticipated to decline in the upcoming quarter as the backlog orders are to be fulfilled first, resulting in lower demand and deals. Additionally, the mills have secured the proper availability of feedstock such as Nickel and Steel scrap, leading to a reduction in the production cost of Stainless-Steel HR Coil in the European spot market.

The production of Stainless-Steel HR Coil in the European spot market has faced uncertainty along with several factors hindering its output rate. The major producer of Stainless-Steel HR Coil across Spain, Acerinox Palmones, is facing a difficult time amidst continuous strikes from the employees as they entered their second week of an open-ended strike due to a deadlock in the collective bargaining process, with no immediate solution in sight. Since February 5, they've been on strike following unsuccessful negotiations that extended over a year. Disagreements arose between management and employee representatives concerning proposed salary increments, production bonuses, and job flexibility during the talks. Additionally, in Finland, the protests, motivated by opposition to the government's reforms of the labor market and reductions in social welfare, have significantly affected both daily life and the economy along with the production of Stainless-Steel HR Coil in the regional mills. The European Union is looking forward to examining the proper functioning of the CBAM measures for the production of Stainless-Steel HR Coil in domestic mills.

The demand for Stainless-Steel HR Coil from the downstream construction sector showed a lingering plunge rate as the previous orders are expected to be fulfilled first, presenting a hindrance to further growth in the residential construction rate. Meanwhile, the market players and financial sector have anticipated that the major economy of Europe, Germany, is likely to show a tendency to move toward a recession period. This led to a lowering in the number of orders placed by domestic buyers for Stainless-Steel HR Coil in the European spot market. Given the current circumstances in residential building construction, characterized by elevated interest rates and construction costs, there are significant challenges impacting construction demand.

According to ChemAnalyst, the price of a European Stainless-Steel HR Coil is anticipated to decline in prices as the consumption rate from the downstream residential and building construction tends to show a bearish market trend. Furthermore, the price of feedstock nickel is presumed to remain on a declining trend as its supply remains in excess. Also, the energy prices are anticipated to get lower amidst a boost in the renewable energy sector, supporting the lower price trend for Stainless-Steel HR Coil in Europe.