Rising nickel prices have lifted the input costs for most stainless steel
producers, significantly, in recent months. In many parts of the world, however,
suppliers have been unable to pass the total amount of this increase on to their
customers. The steelmakers, therefore, are forced to absorb the rising price of
raw materials, thus cutting – or eliminating – their profit margins.
Only in North America have recent increases in alloy extras been fully applied,
without cuts in basis values. This may become more difficult to sustain, in the
coming months, as surcharges continue to rise, but end-user demand remains
The price of nickel has been pushed up by predictions of future supply
tightness. Consumption will be boosted by the metal’s use in batteries for the
growing number of electric vehicles. Fears of possible shortages were raised,
recently, by confirmation of an imminent ban on nickel ore exports, by the
authorities in Indonesia. Although outside parties have announced plans to
invest in nickel refining facilities in Indonesia, the ban will result in
reduced supply, from the country, in the short-to-medium term.
Demand for stainless steel, conversely, is rather subdued. Trade actions, by the
United States, have slashed the volume of shipments – of steel, and manufactured
goods – from China, and other Asian countries. In turn, this has negatively
affected the ability of consumers, in these emerging economies, to buy goods
from prestige suppliers in many developed countries.
Producers, particularly in the traditional stainless steelmaking regions,
continue to struggle with growing global excess capacity. European mills find it
increasingly difficult to compete with price offers from Asia, for commodity
grades. However, they may receive some temporary respite, in the near future, as
the EC Safeguarding quota tonnages for several stainless steel product forms are
projected to be exhausted, before the end of the quota period.
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