The month ended with a big bang. Quite unexpectedly and for the first time it was called for the area of stainless steel flanges: Nothing works. The details can be read here.
General price development flanges
Price increases continued in May – for both C-steel and stainless steel flanges.
The stainless steel flanges have seen a very sharp price increase in recent weeks, which is definitely due to the price increases for aluminum and nickel. The prices shot up at the LME. A nice example of the side effects of policies.
The deadlines for the offers from China, however, melted like snow in May 2018.
How the whole thing ended, you have read here and the current orders are about whether an order can be placed.
In C-steel, the P250GH saw another price increase of about 2% in the first week of May. At this level, the prices are still today. The development is moving slowly, but already noticeably in the direction of the price highs in the last quarter of 2017.
Situation in China
In the short term, there are no indications that there should be major price reductions for import flanges from China in the C-steel sector. The hope that prices could fall as part of the contracts did not go to China but to Eastern Europe or stayed within Europe has not been fulfilled in recent weeks.
From a purely European point of view, this could actually have been a result of a market economy. However, one component is ignored: the market situation in China.
The producers of carbon steel flanges have the hut full. On the one hand, this is due to very large domestic projects, which will run at least until 2019.
On the other hand, it is because of an order churn has taken place. Shandong Province still has no normal day-to-day production. The background: In this province are increasing orders for blind flanges, smooth and threaded flanges.
These orders are now landing in Dingxiang. In addition. To all other orders. For many manufacturers in Dingxiang, this leads to a very comfortable business situation and to full order books. This in turn never brings down prices in a market economy, but certainly longer delivery times. Even if China is definitely not a market economy in the classical sense, the laws of the market definitely prevail.
In the stainless steel sector, it looks even more catastrophic. In our last article we wrote about it. Our partners assume that no change in this situation will occur before mid-June. But even if the first steelmakers are allowed to start production again, you can imagine how many tons of stainless steel were not produced and are missing from the market.
Even though these formulations appear to be contradictory in the face of world overproduction, it is perfectly consistent with the small world of flanges.
Forecast or my view into the crystal ball
This time the forecast is relatively simple for both areas:
- The prices will rise.
- There will be longer delivery times.
Greetings from Bremen – and have a good time!