Tight supply and steep price hikes for bulk ferro-alloys and other stainless steel inputs are encouraging a shift in buying behaviours, with market participants negotiating term contracts earlier, leaning away from back-to-back spot trades and flipping many index-linked discounts to premiums.
Several large European mills have already secured material for the first quarter of 2022, increasingly aiming to stockpile material rather than rely on hand-to-mouth top-ups from the spot market that have become subject to extreme delays and risks of cancellation.
"We are starting to run out of material," a procurement manager for a stainless steel producer said. "People are worried about how long this will go on and are now taking precautions."
A European manganese buyer said that they had roughly 900t of "non-performance" from China this year, with traders "trying to cancel and get out of contracts" on a weekly basis. "There is no certainty so you can't do back-to-back sales," another trader said, adding that they would only commit to deals if material had already been shipped.
With supply chain woes likely to persist in the near-term — amid production cuts in China and Europe, a shipping industry under enormous strain and unusually high freight rates — discounts to indexes have flipped to premiums amid a widespread scramble for the most highly sought products. "Some buyers have no clue on China-dependent commodities," one manganese metal trader said, adding that most end-users...
Read Full Story: https://www.argusmedia.com/en/news/2264919-supply-chain-woes-force-shifts-in-bulk-alloy-purchasing
Your content is great. However, if any of the content contained herein violates any rights of yours, including those of copyright, please contact us immediately by e-mail at media[@]kissrpr.com.
