FALLING RAW MATERIAL
COSTS DEPRESS STAINLESS STEEL PRICES IN 2015
The past year has been
another difficult period for stainless steel producers, distributors
and traders, in all parts of the world, according to MEPS.
In December’s issue of the Stainless Steel Review, MEPS reports that
consumption has failed to grow by any substantial degree and selling
prices have plummeted, driven by falling raw material costs.
The major factor in the reduction in input expenditure has been the
decline in nickel values. During the past twelve months, the price
of nickel, in common with those of most other traded commodities,
has described a generally downward curve. The LME cash figure for
the metal has dropped from over US$15500 per tonne, one year ago, to
US$8650 per tonne, in recent days. This represents a decrease of
around 44 percent.
The nickel price has been undermined, in part, by the
unprecedentedly high level of LME inventory. The official daily
figure rose from 410,000 tonnes in December 2014 to reach a peak of
over 470,000 tonnes in June of this year. Stocks steadily reduced
thereafter, reaching a low of around 393,000 tonnes, earlier this
month. However, a recent influx of material took the total over
438,000 tonnes, a few days ago.
The costs of the other major raw materials have also fallen. The
price paid by US mills for chromium has decreased by around 10
percent in the past twelve months, while the cost of scrap, used in
the American producers’ alloy surcharge calculations, has dropped by
As a result, the December 2015 alloy surcharge for grade 304 flat
products, in the United States, is 46 percent lower than the figure
one year earlier. This contributes to a transaction value for 304
cold rolled coil that is around 37 percent less than last December’s
The mill selling figures for the same product, in US dollar terms,
have fallen by 32 percent, in China, and by nearly 25 percent, in
the EU, compared with twelve months ago.
The persistent negative trend in stainless steel selling values has
created very troublesome business conditions for all participants in
the supply chain – producers, distributors, stockholders, service
centres and traders.
The winners have been the multiplicity of OEMs that incorporate
items which require corrosion- or heat-resisting properties.
Source: MEPS -
Review - December Issue
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