Global stainless steel output reached 14.6 million tonnes in Q1 2026, up just 2.4% year-on-year. The modest growth rate reflects a bifurcated market: Chinese output expanded 5.1%, while European output fell 1.8% and US output declined 0.5%. The divergence is limiting nickel demand growth.
European stainless mills are operating at approximately 65% of capacity, down from 72% a year ago, according to Eurofer. Import penetration reached 28% of the EU stainless market in Q1, driven by lower-cost Chinese and Indonesian material. Outokumpu and Acerinox have both announced temporary production curtailments.
The US market faces similar pressure. US stainless sheet import volume rose 15% in Q1, with Vietnamese and Taiwanese mills gaining market share. The Section 232 tariffs on steel imports have not prevented the inflow, as several countries have quota-based exemptions. US mill operating rates are at 70%.
Nickel demand from the battery sector, while growing at 25% year-on-year, remains a small portion of total nickel consumption. Battery-sector nickel demand accounts for roughly 12% of total nickel use. Even sustained growth of 25% adds approximately 80,000 tonnes of annual demand, which Indonesia alone can supply.
Stainless buyers should expect mills to compete aggressively for orders through Q3, particularly in Europe where demand is weakest. Use the current competitive environment to negotiate extended payment terms and volume discounts. Nickel surcharges are likely to remain subdued.