The month of June in the flange world was characterized by high prices and long delivery times, which was to be expected, as we predicted. This development affected both the steel and stainless steel sectors.
News on flanges
In the carbon steel sector, the pre-material prices for P250GH remained constant and are at the same level as at the beginning of the month. Nevertheless, prices have risen, albeit moderately at around 3%. The reason for this is the development of the exchange rate.
The supply situation remained tense for this area. In addition to the tense situation regarding the procurement of primary material, the renowned manufacturers continue to have a high order entry situation, which further cemented the extended delivery times.
There are future-looking manufacturers, who react to the changed situation with suitable measures and increase their machinery and staffing levels. One of our partners has assured us that the situation in his factory will be back to normal from July.
In the stainless steel sector, the situation remains extremely tense. The manufacturers are still confronted with the extremely difficult situation in material procurement. The initial hope that the situation with regard to steelmakers’ closures will be resolved by the middle of June has not been fulfilled. Now, manufacturers expect that the “green” steelworks, which meet the government’s requirements, will be back online in the first third of July.
Consequently, prices have continued to rise cheerfully due to the shortage, which was exacerbated by the higher order volume from Europe.
Situation in China
It will get worse.
And it will get better.
Because it is about more than the development of prices for flanges.
The Chinese government is consistently following the #gogreen route. A return to the times when smog and other health-burdened influences were pitilessly demanded by the citizens will definitely not happen anymore.
The next step in the chain of measures was the adoption of a new pricing policy based on the motto “polluters pay the costs”. Beginning in 2020, the polluter-pays principle will apply to different prices that will make the causes of pollution or resource intensive industries vulnerable. These companies have to pay higher price for electricity and for water.
This measure also aims to promote, promote and support China’s decision by 2025.
These additional measures, which are definitely definitely welcome in the interests of our environment and the Chinese people, will definitely have a direct impact on the prices of flanges. On the other hand, the number of manufacturers will certainly continue to decline. Thug-slingers have no chance anymore.
Forecast oder my view into the crystal ball
Next to the question of how prices and delivery times will develop in the coming month, it is also imperative to raise the question of how development should be viewed in a wider context. What will the situation be in 48 months, in five years or even in 10 years?
How do you assess the situation? What is your prognosis?
As always, we appreciate your feedback. As always, the most interesting discussions then take place in direct exchange.
Connecting greetings from Bremen – and have a good time!