European stainless steel factories close due to energy crisis
- Stainless steel factories are closing across Europe due to the current energy crisis.
- Around three million tonnes of European stainless steel capacity are at risk.
- This type of “commodity” impasse is far from ideal.
Stainless steel prices continue to struggle heading into the final quarter of the year. Meanwhile, nickel prices are floating just above their 2021 average, closing August at $21,320/ton. Both indices seem to indicate an overly cautious market, with buyers and sellers seemingly waiting to see what the other will do.
This type of “commodity” impasse is far from ideal. MetalMiner advised buyers of rolled stainless steel to expect lower transaction prices as the fall approaches. After all, alloy surcharges are low and competition between service centers is higher. In fact, many U.S. flat-rollers have no customers on allocation, thanks to imports affecting overall supply.
Yet the battle between supply and demand is endless. And in a tight market full of people looking to maximize their dollar, anything can happen.
Stainless steel factories closed across Europe
What would happen if the stainless steel market suddenly lost millions of tons of production? We won’t have to wait long to find the answer because it’s already happening. At the end of August, more and more reports arrived detailing European stainless steel producers having to reduce or stop production altogether.
Of course, Europe is facing a catastrophic energy crisis. While many economists remain focused on the coming winter, Putin’s retaliatory gas cut has already done a lot of damage. So far, around three million tonnes of European stainless steel capacity are at risk. With energy prices soaring, many factories simply cannot afford to “keep the lights on”, so to speak.
At the beginning of August, the Belgian factory Aperam closed its plant in Genk. Shortly after, they reduced the production of their Châtelet mill. More recently, the Spanish company Acrinox announced that it would reduce its production and put around 85% of its employees on partial unemployment. Clearly, all eyes are now on other top European producers, many of whom have just as much incentive to cut and run.
By AG Metal Miner
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