RESEARCH: Asian stainless mills coming under pressure

October 06, 2020 / www.metalbulletin.com / Article Link

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Having found it easier to increase prices than their counterparts in Europe and the United States during the past few months, Asian stainless steelmakers now face a number of concerns.
In the short term, Asian prices have moved down in recent weeks while those in Europe and the US are on the up. This is mostly a reflection of the fact that stainless steel prices are more responsive to costs in Asia. We expect prices in Europe and the US to be more restrained in their movements at least once November arrives.
But there are some troubling dynamics at play with regards to margins for some of Asia's stainless steelmakers.
Above all, there is the fact that opportunities for exporting appear to be narrowing. This month, the European Union launched an investigation into exports of cold-rolled material from Indonesia, after already placing stringent anti-dumping duties on their exports of hot-rolled flat products into the region back in April, which appear to have brought that trade almost to a halt. The US already applies a 25% import duty on all imports.
This tightening of the escape valve comes as production levels in Asia, particularly in China and Indonesia, continue to increase. Despite more impressive demand growth than in Europe and the US, Asian prices have now started to retreat.
Signs of regional discomfort within Asia are also growing - South Korea has this month launched its own anti-dumping investigation into material from China, Indonesia and Taiwan as they seek to avoid an excess of material heading there.
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