- US demand supported by infrastructure, AI projects
- Chinese market remains weak despite production cuts
The global stainless steel market continued to display divergent regional trends, with the US maintaining resilient demand, Europe entering a seasonal correction phase, and China and Taiwan remaining under pressure from weak consumption despite supply-side adjustments. Market participants expect these regional differences to persist through Q3CY’26, while policy-driven supply tightening could support a recovery in Europe during Q4.
US market remains resilient on project-led demand
The US stainless steel market remained relatively stable, supported by strong project-related demand from energy infrastructure and AI data centre investments. While spot buying activity was subdued, healthy contract volumes and low customer inventories continued to underpin demand. However, expectations of lower alloy surcharges in August and higher import offers from Asia and Europe are likely to keep transaction prices broadly stable in the near term.
Europe enters correction after nine-month rally
European stainless steel prices softened for the first time in nine months as lower nickel and stainless steel scrap prices, combined with weaker demand during the summer holiday season, weighed on the market. Prices for 304 cold-rolled coils declined across key markets, while service centres faced margin pressure as higher mill prices could not be fully passed on to end-users.
Despite the current correction, market participants remain optimistic about Q4CY’26. The implementation of revised EU safeguard tariff-rate quotas (TRQs), the 50% over-quota tariff, and the Carbon Border Adjustment Mechanism (CBAM) are expected to reduce imports and gradually tighten supply, potentially supporting prices once inventories begin to decline.
China market remains under pressure
China’s stainless steel market continued to struggle despite production adjustments at several mills. Spot prices remained weak as aggressive pricing by major producers, including Tsingshan, offset support from stronger nickel prices and firmer stainless steel futures. Although inventories have eased slightly, market participants believe the improvement has been driven mainly by low-price restocking rather than a meaningful recovery in end-user demand.
Taiwan faces pressure from low-cost imports
Taiwan’s stainless steel market remained challenged by rising imports of low-priced material, particularly from Vietnam. The influx of cheaper imports limited the effectiveness of recent domestic price increases announced by local producers, while distributor inventories continued to rise. Market participants indicated that weak domestic demand and import competition may keep prices under pressure in the coming months.
Outlook
Global stainless steel market conditions are expected to remain regionally divergent during Q3CY’26. The US is likely to remain supported by infrastructure and industrial projects, while Europe could see a gradual recovery in Q4 if tighter import controls and CBAM reduce supply. Meanwhile, China and Taiwan are expected to remain demand-driven markets, with any sustained price recovery dependent on a meaningful improvement in downstream consumption.
Note: This article is published as part of a content exchange agreement between SteelDaily and BigMint.
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