⚔️ Indonesia's Low-Cost Offensive Shakes Europe's Stainless Steel Core

Structural Crisis Deepens Amid Global Realignment

By the Dong-Yu Stainless Steel Team

📉 Europe Under Siege: Volume and Value Collapse Across the Board

According to Kallanish and BIR's Stainless Steel Mirror Report, Europe's stainless steel market continues to suffer from demand stagnation and persistent price erosion. Both flat and long products are experiencing simultaneous declines in volume and pricing, while stockpiles remain high across mills and service centers.

Joost Van Kleef (Chairman of the BIR Stainless Steel Committee, representing Oryx Stainless) notes that the outlook for Q2 and Q3 2025 remains bleak. Ruggero Ricco, Executive Director of Italy's Nichel Leghe, adds:

“There is no sign of bottoming out. We are seeing destructive price competition fueled by shrinking domestic demand.”

🛠️ Indonesia's Cost Edge: A Dimensional Strike

The core disruption lies in Indonesia's low-cost, vertically integrated model powered by nickel pig iron (NPI) technology. With production costs nearly 30% lower than European counterparts who rely on scrap-based melting, Indonesian stainless steel is flooding global markets with a cost structure Europe cannot match.

“While European producers struggle with complex scrap cost structures, Indonesian material cuts directly into the heart of the market,” Ricco warns.

As scrap prices in Europe drop over 15% in the past six months, 304-grade stainless scrap is nearing the psychological threshold of €1,200/ton, and may fall below it by June.

🔄 Strategic Realignment: A Forced Shift in Input Models

This is no longer a pricing war; it's an industrial restructuring. European producers are now reconsidering upstream strategies, including:

·         Switching from scrap to NPI or ferro-nickel

·         Exploring billet imports from Asia

·         Reassessing long-term sustainability of domestic supply chains

Meanwhile, Indonesian producers continue to bypass EU safeguards through rerouted trade and indirect market penetration.

🧠 Strategic Commentary

This is a textbook case of dimensional disruption: not through incremental competition, but via a wholesale structural asymmetry. Europe's century-old stainless industry is being challenged not just on cost, but on industrial logic.

Protectionism alone is not a strategy, technological reinvention and strategic input restructuring are now imperative.

The longer Europe hesitates, the more Southeast Asia consolidates its position as the epicenter of global stainless steel supply.

📌 Closing Thought The reshuffling of global stainless steel dominance is underway. What we are witnessing is not just a trade shift, it's the collapse of a legacy model and the rise of a new industrial order.

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