The European stainless steel market is expected to recover to levels not far from pre-COVID levels of around 1.2 million mt of finished longs products this year, well above the 1.05 million mt of 2021, Italian stainless maker Cogne Acciai Speciali director of sales Emilio Giacomazzi said.
CAS: A Leading European Stainless Steel Manufacturer
CAS, which has a capacity of more than 200,000 mt/year of stainless steel, is one of the leading European manufacturers of stainless steel and nickel alloy long products and provides melting, casting, rolling, forging, and machining services. This company sold 180,000 mt of stainless long products in 2021.
“We had a pick-up of stainless steel demand after the COVID pandemic [albeit] since May the market is in a pause and stocks are high, and we also have seasonality -- but overall demand is good,” Giacomazzi told S&P Global Commodity Insights on June 23.
“Pricing of raw materials had increased, yet we succeeded in passing them, as with many competitors, to our final products,” he added, noting that high energy and nickel prices were partly caught by the flexibility in the company’s long-term contracts.
Nickel Price Trends
The London Metal Exchange three-month nickel contract reached a peak of $48,078/mt on March 7 after the Russian invasion of Ukraine but has since retreated to $24,449/mt on June 22, down 15.7% since the beginning of 2022 but still significantly higher than the average of $19,406.38/mt in the second half of 2021.
Demand Drivers
“Demand continues to be driven by the automotive sector, despite the new engine regulations, but also the aerospace, oil and gas, medical, and food sectors, and we have a very good order intake until Q1 2023,” Giacomazzi said.
Merger to Close This Year
CAS’s board approved the sale of a 70% stake in the company to Taiwan-listed conglomerate Walsin Lihwa Corporation at the end of May. If approved by antitrust authorities, the agreement would create the world's third-largest producer of stainless long products with a capacity of 700,000-800,000 mt/year for long stainless steel products.
Giacomazzi said the deal is to close this year, with the companies fine-tuning documents to be submitted to the Italian government.
Investment Plans
Giacomazzi added that the company expects to invest EUR 110 million on increasing its production capacity by at least 50,000 mt/year and on environmental upgrades between 2022-2024. The additional product is likely to be exported to Asian markets.
“China’s demand has slowed down, but now that COVID lockdown measures are loosening, we’re expecting a pickup in demand, and therefore we think that part of the new production will go to Asia,” he said.
“We are also very positive for the US market, particularly for aerospace and CPI [chemical and processes industry], and we do have a strong ambition to further enlarge our operations in North America,” he said.
CAS currently operates four warehouses in the US.
