Europe’s flat rolled stainless market is now in hibernation, as virtually the whole supply chain and many end users turn their backs on depressed conditions for a longer than usual holiday shutdown. But this period of slumber is unlikely to be broken by brighter, warmer market conditions in January.

Although a flurry of ordering activity is expected from mid-month, this will be a stock adjustment exercise, and some think it may quickly lose momentum.

Steel Business Briefing can detect no sign of optimism about any upturn in end market volumes in the opening months of 2010. While most believe the market is at the bottom, there is much uncertainty about when a meaningful lift in user demand will occur.

Stocks are currently at very low levels, lower now than in November. A poor market, declining surcharges, readily available material and the usual year-end accounts-led stock attrition diluted trading. “For us the year ended at the beginning of November,” comments one large German distributor.

Base prices are quite steady at a low level, and imports of Asian origin coil, though present, are not an issue, SBB hears. European mill lead-times are now into early February.

Of the major end markets, automotive has probably been the steadiest of late, but there is uncertainty about this sector with government scrappage incentives in the core German market ending. Shorter ordering periods by this sector underline this uncertain mood.

But there is one consolation. Commodity grade austenitic base prices are about 20% higher now than at this time last year.