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While a world leader in many areas, the United States is a relatively small player when it comes to stainless steel. It produces a small amount of material, both in absolute and relative terms (i.e. compared to the size of its population), while a large share of its industry is in the hands of bigger European companies. Nevertheless, for over two years now, prices there have remained solidly above those in other markets, primarily on the back of stronger local supply/demand fundamentals and widespread trade protection measures.
Those dynamics may soon change, however, with a US presidential election imminent that could see fundamental changes in trade relations emerge over the coming years. We do not expect relations with China to become much friendlier but the country may become more open to EU suppliers, as well as others in Asia.
All this comes at a time that Europe appears to be heading in the other direction, tightening further the access to its market enjoyed by China and Indonesia in particular. Indeed, since April of this year there has been a dearth of stainless steel flat products imported into the EU from China. With new trade investigations being launched into flat-rolled Indonesian products, a similar fate may await such products from that country as of April/May 2021. We take a long look at this topic in our Europe analysis this month that assess the outcomes for import penetration and pricing in the region.
Asia, despite being by far the biggest market for stainless steel these days, remains stuck dealing with the consequences both of trade measures elsewhere and rapid expansions in capacity at home. Margins and prices remain lowest in this region and, as we discuss in our Asia analysis this month, this will only be rectified by adjustments to local supply - a task that has often proved to be beyond producers there.
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