Inventory levels in the US stainless steel industry are very low. Although steel use rebounded rapidly after the downturn caused by the pandemic, steel production resumed at a slower rate. This has led to a serious imbalance between supply and demand for market development. Buyers report that in several grades and sizes of stainless steel flat products, there are no materials available in the United States.
U.S. producer Outokumpu and North American Stainless has been working hard to match production with demand. The purchasing manager is now placing an order for delivery in the last few months of the year. The strike at the ATI plant has put further pressure on the already stretched supply chain. Delivery from domestic suppliers was at least a few weeks late.
Market participants reported that an unprecedented situation caused a US steel mill to breach a contract with certain customers for orders due in July to September. The NAS force majeure statement caused additional panic, albeit only a few days, because it was quickly revoked.
According to reports, many service centers and distributors did not stock until later this year. Due to the extremely limited selection of domestic products, some buyers have begun to purchase large quantities from overseas suppliers. However, imports are hampered by insufficient supply of containers and high transportation costs.
The severe shortage of materials on the market continues to drive prices up. Since the beginning of 2021, US stainless steel producers have repeatedly lowered their discounts on cold-rolled materials. Therefore, since January this year, the base value of US cold rolled 304 and 316 has increased by more than 20%. In addition, the additional prices of steel mills have also been raised.
It is expected that demand will remain strong in the second half of 2021, and materials will still be difficult to obtain in China. For many American buyers, the coming months can be extremely challenging. The base value is expected to increase further in the third quarter. Stainless steel prices are expected to remain high for the rest of 2021. Source: MEPS