For the Quarter Ending September 2023


North America:

In Q3, stainless steel round bar prices in North America initially surged, primarily attributed to increased nickel costs and heightened activity in the automotive and construction sectors. In response to inflation, US factories raised their base prices. The automotive industry reaped benefits from Tesla's success and electric vehicle tax cuts, while construction projects fueled additional demand. However, a combination of heightened demand and reduced production led to low inventories. The US spot market witnessed a price decline due to diminished demand stemming from market uncertainties and economic factors, including restricted oil and gas availability due to Russian sanctions, OPEC export limitations, the UAW strike, and the US Federal Reserve's decision to maintain interest rates. On the supply side, nickel feedstock experienced a modest increase, partly due to higher extraction rates from overseas mining nations, linked to Norilsk Nickel's financial challenges and the sale of the Avebury nickel mine. The Philippines also planned investments in processing plants. The diminished demand from oil and gas, OPEC supply cuts, and market uncertainty posed concerns for US Stainless-Steel Round Bar producers, resulting in slower market trade and prompting buyers to adopt a wait-and-watch approach.

Asia-Pacific:

In Q3 2023, China witnessed a substantial decline in stainless steel round bar prices, primarily driven by weak demand from both local and international industries. Additionally, an increase in the supply of crude nickel, a crucial component in stainless steel production, contributed to the price drop. Local Chinese factories, such as Tsingshan Group in Indonesia (with a 50,000-ton capacity) and Zhejiang Huayou Cobalt Co. in Zhejiang province (with a 36,600-ton capacity), escalated nickel production. Huzhou Jiuli Stainless Steel Material Co., Ltd. received a $4.1 million investment from Zhejiang JIULI Hi-tech Metals Co., Ltd., signaling an intent to enhance production. Stainless Steel Round Bar inventories faced pressure due to an uptick in Stainless Steel HR Coil supplies, driven by production increases from Huzhou Jiuli and new contracts by Zhejiang JIULI. Despite falling prices, local consumers increased purchases for destocking. Demand for feedstock nickel from the electric vehicle sector prompted local mills to adjust prices upward to cover rising production costs. This intricate supply-demand balance created a challenging market, with manufacturers striving to maintain stainless steel round bar prices in the Chinese spot market.

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Europe:

In July, Germany experienced fluctuating market sentiments. Initially, optimism prevailed as stainless-steel rod prices surged due to higher nickel costs, driven by growing electric vehicle demand in Europe. Factories adopted aggressive pricing to attract consumers, resulting in raised base prices. However, the sector faced disruption when the Slovenian Steel Group, the largest producer, experienced a production halt due to a hot rolling mill engine failure, impacting stainless steel round bar supplies. Government intervention reduced inventory, with a three-month recovery estimate. Despite strong demand in the German automotive sector, construction weakened due to rising interest rates and inflation. The European Central Bank increased rates by 0.5%, leading to a decline in building sales. Nickel inventory levels rose as aluminum refineries invested in nickel mines. Stainless steel bar supplies remained ample due to regular mill production despite reduced construction demand. German automakers encountered competition from Chinese and American firms, with Tesla intensifying market challenges. Additionally, building permits decreased as local housing purchases declined, contributing to a decline in stainless-steel round bar prices for the third quarter of 2023.








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