The global Eurozone Manufacturing PMI has contracted for eight consecutive months since July 2022, with many stainless steel consuming industries expecting a decrease in production this year. High interest rates hinder the construction sector, while automotive production remains below the predicted levels.
Stainless steel stocks are starting to dwindle across Europe, but destocking is slower than expected due to weak demand. Buyers are reluctant to make long-term purchasing decisions and prefer to buy materials from existing stocks.
The European average transaction value of MEPS for 304 cold rolled coils in March was €2939 per ton, the lowest in 22 months. The equivalent price for 316 cold rolled coils remained approximately €720 per tonne less than the alloy surcharges the mills published for March. The difference between European effective values and Indian offers is more than €1500 per ton for 304 bright drawn bar, excluding all applicable taxes.
Despite the price cuts, inventories remain high, especially in hot and cold rolled flat products, which is not expected to lead to a significant increase in purchasing activity. Buyers are worried that price drops will further devalue their existing stocks. Most market participants expect both price and demand conditions to remain challenging throughout the second quarter.
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