“Don’t hold out hope for the U.S.’s stainless steel shortage to get better until you know of new supply coming online,” guest columnists wrote in AgMetalMiner.com.

“There appear to be no plans in the works to increase domestic production,”  C.J. Nord of Supply Chains for Good, and Harry Moser of the Reshoring Initiative wrote.  “Supply may tighten even more than we have seen.  This is similar to the chip shortage.”

Nord and Moser said the shortage “became a national concern in January 2021, when ATI Metals took 304 stainless offline and shifted production to 316 grade.”  ATI’s change took away about 30% of the U.S. supply offline.

Even if a mill decides to bring 304 online, it could take as much as a year for supply to reach the distributor level,” they estimated.

“This is a long-term, painful shortage,” Nord and Moser concluded.

One fastener manufacturer told GlobalFastenerNews.com that their wire supplier would no longer be a source for 430 grad CHQ.

The AgMetalMiner.com guest columnists wrote that projects are being canceled due to lack of stainless steel and/or a price increase “that puts it out of budget. The shortage appears to be hitting mom-and-pop manufacturers much harder than the large OEMs.”

“Engineers are well respected for developing solutions to material shortages,” Nord and Moser wrote. “3D and additive manufacturing has created new solutions.”

There may be other changes a company can make internally, they suggested.

“A team investigating the shortage — including a broad range of manufacturing trade associations, steel distributors and manufacturing companies — concluded that the broader economic impact is potentially severe,” Nord and Moser wrote.

“Reshoring is booming due to supply chain disruption,” but companies will be less likely to reshore if 304 is not available, Moser said.

Impacted industries include construction, infrastructure, defense, aerospace, medical devices and food equipment. OEMs impacted include HVAC, mufflers, plumbing, fabricators, stampers, shims, machine shops and springs.

 • Western Metal Roofing.com noted steel prices hit record highs in 2021 due to increased demand “and a supply shortage throughout the global steel market that left everyone scrambling to find raw material.”

Steel supply began to improve in the fourth quarter of 2021, but there is “still a very large demand for steel, especially from the automotive industry that needs steel for its computer chip shortage,”  WesternMetalRoofing.com reported.  Customers are “under allocation,” and it can take four-to-six months for delivery

“As of October 2021, steel supply is just beginning to improve,” WesternMetalRoofing.com observed. “While it’s nowhere near where it was prior to the start of the Covid 19 pandemic, there is better availability today. However, we have to emphasize that while things are starting to look up, we are still in a steel shortage.”

High steel prices “have started to level off” and steel buyers aren’t find the “month-over-month volatile price increases that occurred earlier in 2021. “We expect the price of steel overall to remain flat into the 2nd quarter of 2022 based on the state of the steel market today. As imported steel is starting to come into the US more, it will help with the overall steel shortage. We should see the supply being less tight by the end of the 2nd quarter of 2022.”

“However, do not expect prices to drastically fall in 2022.”

In addition to more demand and inflation, China is cutting back power for production to reduce carbon emissions by working fewer hours.

 • S&P Global Platts reported steel imports into the U.S. “are expected to rise enough in 2022 to keep pressure on domestic prices that reached record levels in 2021, but these shipments will not necessarily represent an import surge.”

John Anton, director of pricing and purchasing at IHS Markit, said the steel imports this may appear as a spike, but this is mainly because imports since 2018 have been abnormally low due to tariffs, the coronavirus pandemic and logistics issues.

“I would see imports maybe getting back to 2015-2017 levels but do not see them surging,” Anton said in a recent interview with S&P Global Platts.

 • UK-based Meps International Ltd, which monitors worldwide steel market data, noted steelmakers are reported record profits.

The Meps European average 304 cold rolled coil basis value now equals the January 2007 all-time high and the U.S. figure is at its highest in 14 years.”

Stainless prices are “expected to decline more slowly than they increased in the past 12 months,” MEP forecasts.

North American prices “are expected to be constrained by reduced purchasing activity” in the first half of 2022. Buyers already have significant quantities of material already on order, with both domestic and overseas suppliers. “However, supply from domestic stainless steel producers is expected to remain restricted. This will help to keep prices at elevated levels, in the near term,” MEP reported.

European prices are forecast to move upwards early in 2022.

“However, inventories are increasing for most grades and sizes. This, plus a softening in demand, is expected to restrict the level of price rises that stainless steel buyers will be prepared to accept during this period.”

 • SMM News, which covers the metal market of China, predicted that for the trend of stainless steel prices in 2022, “the center of gravity moves down, the price rises first and then suppresses, the performance is strong in the second and third quarters, and the overall fluctuation decreases.”

SMM noted Ferro nickel production in Indonesia has accelerated, but will remain tight in the first half of 2022.

Ferrochromium supply “tension is eased,” but overseas capacity expansion is “relatively slow” while demand for stainless steel is strong.

Stainless steel production capacity in Indonesia is up and “we are cautiously optimistic about demand, and the overall supply and demand of stainless steel is loose.”

 • The Global 304 Stainless Steel Market study projects that over the next five years the 304 Stainless Steel Market will register “a magnificent spike in CAGR in terms of revenue.”

The Covid-19 pandemic led to lockdown regulations in multiple nations “resulting in disruptions in import and export activities of 304 Stainless Steel.”

 • TradingEconomics.com reported Shanghai steel futures were close to levels of late October “amid limited supply, rising iron ore and nickel prices and prospects of a demand boom.” Production in China is likely to be constrained due to factories maintenance in the first quarter, the Lunar New Year holidays and the desire to limit pollution over the Beijing Winter Olympics. Prices of nickel and iron ore for steel “remain elevated, with possible supply disruptions in top iron ore exporter Australia due to a surge in coronavirus virus cases.” Second quarter demand in China will increase “as the construction and infrastructure sectors pick up and the Chinese authorities adopt stimulus measures to shore up the economy.”

 • Reuters.com reported Chinese stainless steel futures surged more than 5% earlier this month, “boosted by tight supply concerns as producers cut production, while strong raw material prices also offered support.”

“Domestic stainless steel firms are stepping up maintenance in the first quarter, while affected by the Spring Festival holidays and Beijing Winter Olympics; overall production is expected to be limited,” Reuters quoted analysts with Jinrui Futures.

Nickel prices keep stainless steel prices up cue, Huatai Futures told Reuters.

The China Iron & Steel Association projected China’s 2021 crude steel output would fall to 1.03 billion tons from a record 1.065 billion tons to reach a “supply and demand balance.”

 • Andindya Barman of Zacks described the steel industry as coming “roaring back in 2021 after bearing the brunt of the pandemic last year, taking succor from a strong revival in end-market demand and an upswing in steel prices.”

“The pandemic put most commodities on slippery ground last year and steel was no exception. A slowdown in demand across major end-use industries put a dent on the steel industry for much of the first half of 2020,” Barman wrote. “In particular, the pandemic dealt a fresh blow to the U.S. steel industry, which reeled under the effects of the U.S.-China tariff war.”

Demand for steel picked up on the resumption of operations across major steel-consuming sectors such as automotive, construction and machinery, following the easing of lockdowns and restrictions globally. Steel prices have also witnessed an unprecedented surge this year on the back of an upturn in demand across key markets, tight supply conditions and low steel inventory throughout the supply chain.

Stocks of several steel companies “popped this year driven by the positive momentum of the industry.”

Barman cited Commercial Metals Company, EVRAZ plc and U.S. Steel Corp. as notable.

“The rebound across major end-use industries such as construction and automotive represents a tailwind for the steel industry,” Barman wrote. “However, the rapid spread of the Omicron variant of coronavirus may disrupt economic activities and impact steel demand over the near term.

The $1 trillion bipartisan infrastructure bill President Joe Biden signed “is expected to be a significant catalyst for the American steel industry and U.S. HRC prices in 2022.” The bill includes about $550 billion in new spending on roads, bridges, tunnels and the electric grid, as well as airports, broadband and other infrastructure improvements.