[ad_1]
Inventory levels in the US stainless steel industry are extraordinarily low. While steel use rebounded quickly from the pandemic-induced crisis, steel production has resumed at a much more gradual pace. This resulted in a substantial imbalance between supply and demand developing in the market. Buyers report that in several grades and sizes of stainless steel flat products, no material is available in the United States.
American producers, Outokumpu and North American Stainless, struggled to match production with demand. Purchasing managers are now placing orders for deliveries in the final months of this year. Strikes at ATI facilities have added additional pressure on already stretched supply chains. Deliveries are at least several weeks late from national suppliers.
Market participants report that unprecedented conditions led a US factory to forgo contracts with some customers for orders that expired between July and September. NAS’s force majeure declaration caused further panic, albeit for only a few days, as it was quickly revoked.
Many service centers and distributors would be left with no incoming material until the end of the year. With exceptionally limited options available domestically, several buyers have started purchasing volumes from overseas suppliers. However, imports are hampered by low container availability and high shipping costs.
The severe shortage of material on the market continues to drive up prices. Since the start of 2021, US stainless steel producers have reduced discounts on their list prices for cold-rolled materials. As a result, the base values ​​of cold rolled 304 and 316 in the United States have increased by more than 20% since January of this year. In addition, upward adjustments were made to factory price supplements.
Demand in the second half of 2021 is expected to remain strong and equipment will remain difficult to source locally. The next few months are likely to be extremely difficult for many US buyers. Further increases in base values ​​are expected in the third quarter. Stainless steel prices are expected to remain high for the remainder of 2021.
Source: MEPS
[ad_2]
