While much commentary has been written about Asian economies performing far better than those elsewhere this year during the global Covid-19 pandemic, it is stainless steel markets in Europe and the United States that are ending the year in better shape than their Asian counterparts.

We do not talk of demand levels or demand growth here of course - in this regard Europe and the US are set to significantly under-perform Asian markets this year. Instead, we talk of pricing direction and producer margins, with stainless steelmakers in Europe and the US in fact better placed in terms of profitability even as these regions continue to deal with large numbers of Covid-19 cases relative to Asian countries.

In some ways, this reflects the increasing regionalization of stainless steel markets - another trend, sometimes termed localization, which has been written about before and represents a move away from globalized markets.

In both Europe and the US, formidable trade barriers are in place against imports of Chinese stainless steel for instance. Should Chinese stainless steelmakers overproduce - as they have been known to do - then that surplus increasingly has nowhere else to go but either the local market or nearby regional markets. The result is a slump in margins for Asia’s stainless steelmakers even as demand growth remains impressive.

Our tracker this month looks at these dynamics in detail, while our discussions of European and American markets look at just how far these markets in turn can pull ahead of those in Asia, at least in terms of pricing and producer margins, and whether their own trade protections will or can continue.

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