London — Market dynamics in the European stainless steel market are "overshadowed by weak nickel prices but with longer delivery times as a positive sign," German stainless distributor Damstahl said Monday in its latest market report.
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"Rock-bottom prices for flat products indicate that big volumes of Asian material still sit in service centers and warehouses across Europe," Damstahl said.
Order books of EU mills started to fill up and are almost full until the end of the second quarter, but big service centers remain reluctant about placing larger orders as stocks are still on a sufficient level for cold-rolled products, the company said.
"There have even been rumors about order cancellations in anticipation of a further nickel price drop which could be possible for a short period of time," it added.
The London Metal Exchange nickel cash settlement price hit its lowest in almost six years at $12,260/mt in mid-April, since when the price has rebounded by around 15%.
In euro terms, the increase has been closer to 10% over the same period, however, given the recent weakness of the dollar against the euro.
In April, demand within the German stainless steel market was stable in most of the industry segments, it said, adding that there is "no sign of big de- or upstocking yet."
Delivery times within the German stainless steel market remained almost unchanged, "supporting the presumption that there is still sufficient material on stock," Damstahl said, adding: "Distributors and end-users are hunting for the lowest prices and it is to expect that the decline in the surcharges for May will intensify the competition once again."