STEEL PRICES AT RECORD HIGHS - MORE RISES IMMINENT
Stainless steel prices have
reached record levels, and look set to advance still further in the
next few months. Including raw material surcharges, MEPS transaction
prices for cold rolled 304 in Europe and North America now exceed
$US4,500 per tonne – an unprecedented high value.
In Asia, the MEPS cold rolled 304 price is
rather lower at $US3,706 per tonne, and has some catching up to do.
Significantly, some major Asian mills have announced plans to raise
prices further during the fourth quarter.
Cold rolled 304 prices have virtually
doubled since the start of this year, and have more than tripled
since they touched their most recent historical low point in the
period December 2001 to February 2002. At that time transaction
prices were as low as $US1,300 per tonne in North America, $US1,173
per tonne in Asia and $US1,234 per tonne in Europe. The price of
nickel in those days was around $US5,000 per tonne – today it is
over $US30,000 per tonne.
Basis prices have certainly increased this
year, and may rise further during the fourth quarter. But most of
the recent advance is attributable to raw material costs. The alloy
surcharges that North American and European mills add to their basis
figures have jumped by over 160 percent since the start of this
year. The alloy surcharge today accounts for the majority of the
Buyers of stainless steel appear to have
become much more cautious as prices have risen. The steep increase
this year has added a greater element of uncertainty to trading
conditions. Users who had de-stocked when alloy surcharges reached
$US1,500 per tonne – in the expectation that the climb in the
nickel price would go into reverse – now find themselves obliged
to pay a lot more for new orders.
However, this does not appear to have kept
buyers out of the market to any severe degree. Mills report steady
demand from end-users, with delivery lead-times for some products
stretching into January and even February. Some supply constraints
are also affecting current market dynamics.
Source: MEPS - Stainless
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