Stainless steel demand has weakened in recent weeks due to a somewhat lowered activity at end users. Particularly, order intake from project industry and transportation has dropped in Germany due to a continuous weakness in export markets.
There is however justified hope that the demand situation will improve in the second half of 2012 again.
Stainless Stock-reach has increased to 60-65 days for flat products in January. Due to up-stocking in Q1/12, it is expected that stock reach for flat products has climbed to 65-70 days at the end of last quarter. Stock-reach for hot rolled and bright bars was even around 130 days in early January 2012. It is expected that stockists have not increased stock levels substantially since then.
Process Industry / Machinery: German association VDMA has revised its segment turnover from 4% growth to ‘0’ growth for 2012. Major reason is the weakness in export markets (China, Europe).
China was the largest buyer (~16 bn €) of German equipment in 2011, followed by the US (10 bn €). However, over 50% is sold to European countries (Largest: France, Italy, UK).
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German economic think tanks have revised their GDP forecast in the traditional ‘spring forecast’ from 0.8 to 0.9% for this year and to 2% for next year. According to this forecast, Germany will remain the European locomotive. Germany has improved its competitiveness during the last years.
New car registrations went up by 3% in March against the European trend (-7%!) – Q1/12: European registrations dropped by 8%, while German car registrations increased by 1.4%.
Netherlands
Stainless steel demand remained relatively flat in the Netherlands in the first quarter, Damstahl was however able to gain shares against the general market trend.
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In contrast to Germany, the Netherlands is currently suffering from recession and steeply falling home prices. Industry production in February 2012 fell by 3% (yoy) compared to a 1% drop in January. Rating agencies have warned that the Netherlands must implement economic reforms to prevent negative action (losing of triple A rating possible).
United Kingdom
The stainless steel market has been slightly subdued in April so far with the bank holidays and Easter being, in part, a contributing factor. For Damstahl UK (with focus on tubes/pipes), the situation was however slightly more satisfactory with reasonable order intake.
Prices remained very competitive for bulk orders. Good stainless steel stock levels availability in most product areas. Generally, prices remained fairly flat for April 2012.
