20 December 2022 – High absenteeism rates of up to 40% among Chinese steel workers, are likely to soon have an impact on the availability of steel and stainless steel. New threat to Indian steel industry on European horizon? Nickel starts new rally. And the impact of the current raw material mix on European stainless steel alloy surcharges for January 2023.
China: Supply bottlenecks in the steel industry possible due to high default rates
Sources in China report that 30 to 40% of steel workers nationwide are currently absent due to Corona diseases. Even if the industry there tries to play down the situation and speaks of normal operations, such high absenteeism in the workforce can hardly be compensated. This should therefore have an impact on the availability of steel and stainless steel from China.
Furthermore, sickness-related absenteeism is reported from the domestic transport sector in China, which is likely to further contribute to delivery delays, shortages and outages.
New threat to Indian steel industry on European horizon
India has emerged as the world’s second largest steel producer after China, according to its own figures. The Indian steel industry, which is almost exclusively geared to selling abroad, exports nearly 40 million tonnes of steel a year to the European Union.
New EU measures against Indian steel imports expected soon?
This is unlikely to have escaped the notice of the European steel industry and its lobbying associations, and it can be assumed that the competition watchdogs of the European Commission are also following this closely. And it can be assumed that, in addition to the EU Safeguard measure and the existing anti-dumping and countervailing duties against Indian steel products, further measures will soon follow.
CBAM, ETS, WSR – what comes next?
Especially since it is to be expected that the association of European steel producers, EUROFER, will again focus more on steel imports into the EU with the conclusion of the negotiations on CBAM, ETS trade and waste shipment regulation from 2023.
Nickel jumps and EU alloy surcharges for January 2023
After falling in Monday’s trading session, presumably still in reaction to last week’s switch in contracts, nickel has already started its first big rally today (Tuesday). Currently, the base metal is up more than 6.5% (10:13 GMT). This means that nickel has already more than made up for the losses of the previous day and is back above $ 29,000 per tonne.
Will EU stainless steel alloy surcharges rise in January 2023?
As things stand, the alloy surcharges of the European stainless steel producers should benefit from the significant increase in nickel, steel scrap and molybdenum prices. Ferrochrome prices have stabilised recently, providing further support. Looking at the raw material mix for the most commonly used grade 304 stainless steel alone, EU alloy surcharges are likely to increase between 5% and 8% in January 2023.
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.