Welcome to the club, stainless steel.
The tightness in stainless steel, however, isn’t as all-encompassing as its fellow metals, currently limited only to cold-rolled stainless steel products. This includes your standard 300 series grades in common finishes as 2B, Polished, BA, 2D, tempered, and Rolled On.
What stainless steel is in tight supply?
Cold-rolled stainless steel is on ‘allocation’ by leading mills NAS and OTK through Q1 2021. What that essentially means is these mills will continue providing close to the annual average tons per month to suppliers, but there would be no guarantee to fulfill the request for additional tonnage in the near term.
For example, lead times for these products are extending out as far as mid-to-late March 2021.
Why is stainless steel in tight supply?A few factors have converged, creating the current situation:
- At the mill: In addition to the factors stated above, there are fewer mills producing cold-rolled stainless steel. For instance, earlier this year ATI announced it was shutting down their DRAP 60” wide line while reducing its production of 48” wide cold rolled products, focusing instead on specialty products like nickel.
- Overseas: Like aluminum and carbon steel, stainless steel continues to feel the impact of lighter imports due to Section 232 quotas and tariffs. This means that while inventory may be available in high-production regions like Asia, the premium to obtain such products isn’t cost effective.
- In the field: Demand continues to escalate, driven in large part by markets like consumer appliances and automotive. After months of depressed activity, these markets are once again ramping up production and placing even greater strain on the supply chain.
What does it mean for you?
Tight supply doesn’t necessarily mean no supply. But communication is key. Ensure your sales representative knows your current needs as well as any anticipated changes in your forecast.