With little current activity in the European stainless bar market, suppliers are now looking to 2010, though not with any great optimism.

Forward visibility remains very poor, although some believe there will be an improvement in business volumes from mid or late January onwards. If there is, it is likely to be due to stock adjustments rather than any improvement in end-use demand.

Earlier hopes of November/December bookings for Q1 2010 delivery proved largely unfounded. Sources say buyers had good reason to hold back. Alloy surcharges continue to decline and bar is readily available from mills and stockists. There was some late Q4 project-driven business however.

Stocks generally are very low, but some mills and distributors still hold more steel than they would like, Steel Business Briefing hears. Rolling mills are operating at 50-70% of capacity, and forged bar producers much less. Views on rolling mill lead-times vary, but 6-10 weeks is common.

Although most in the supply chain think the market has bottomed, the crucial question is: when will it improve?

Automotive is perhaps the strongest performer at present, but some doubt this will last through 2010. Oil/gas and process industry demand has weakened recently, except for occasional project-based orders, and there seems little enthusiasm about construction sector demand. Machine building remains in a poor state. Overall, only very modest market growth is expected in 2010.

Base prices are reasonably stable at a low level (see tables). Some mills tell SBB they intend to apply increases in Q1. Bar is still arriving from Asian mills unable to sell into China’s weaker market, particularly from India.