In contrast to continuous weak markets in Southern Europe, demand from end users in Damstahl-Land remained satisfactory in all months of Q1/12 but also started to slow in April. In spite of an expected (temporary) softer business in Q2/12, a positive market growth is expected for this year. Demand growth in Damstahl-Land (Denmark, Germany, Sweden, Netherlands, Norway, UK) will be most likely above the European average (~1%).
Stocks: European Stainless steel stocks in Europe are sufficient at current sales levels from stocks. Most buyers were not urged to buy material for stocks amid falling or stagnant Nickel prices. It is expected that stockholders will keep stock levels more or less unchanged in Q2/12. Early indicator for increasing Ni prices in the near future: 18/8 scrap market is currently tight with shrinking discounts on raw materials in scrap.
End Use: European end use is a mixed bag. 2011 ‘winner’ process equipment suffers currently from softer order intake due to absence of strong orders from export markets (i.e. China) and stagnant demand in local markets. It is expected that demand from process industry could increase in HY2/12 (food processing, chemical industry) – leading to a positive stainless demand growth this year. Transportation sector is weak in Europe. Except Germany, car registrations and production are significantly below last year’s numbers.
Read more: Damstahl: EU return to positive results in Q1/13
Residential building and construction is strong in Germany and Norway but still disappointing in Denmark and the UK. Commercial and public activity will remain out of steam in 2012. Nevertheless, stainless will continue to take over market shares from other materials - a 2% growth for Europe is still realistic for 2012.
Consumer good demand will slightly grow as consumers are becoming less nervous about Eurozone future.
Mills: profit situation of European stainless steel flat mills will remain difficult in Q2/12. In the current market situation, it is not possible for them to lift base prices as needed. Due to a weak local market, Chinese mills are increasingly interested in export opportunities to Europe. The wide price gap (> 500 € between China and Europe) is already an invitation for Chinese mills and should not get any wider.