European stainless steel producers have raised their prices for 300 and 400 series hot and cold rolled coil multiple times throughout December and January. Buyers complain of offers being made by suppliers and withdrawn soon afterwards.
As a result of not recovering all of their rising input costs through the alloy surcharge mechanism, Acciai Speciali Terni recently issued its customers with notification of an additional ‘extra-ordinary scrap surcharge’. This has been set at €214 per tonne, for deliveries confirmed for February.
The additional charge has been met with resistance from some customers, who have already endured significant price increases during the past few months. Moreover, some of the material may have already been sold and contracts negotiated. This makes it difficult to pass the extra cost through the supply chain to end-users.
In addition to the rapidly rising prices, buyers are faced with long delivery lead times. Automotive and white goods companies resumed production with stronger demand than many anticipated. This has quite quickly resulted in low stock levels throughout the distribution chain.
Moreover, buyers are questioning if underlying demand is sufficient to sustain the rapid rise in prices, beyond the Q1 of 2021.