STAINLESS STEEL PRICES
AT CROSSROADS - MEPS
Global stainless steel prices are going
through a transitional stage, according to MEPS research. Transaction values in June were pulled
in all directions by a variety of different market forces.
After rising relentlessly since the beginning of 2014, the LME
nickel price peaked in mid-May, at over US$21,000 per tonne. Values
have fallen back since then, mostly fluctuating in a range between
US$18,000 and US$19,000 per tonne in recent weeks.
Consequently, in markets that employ an alloy surcharge system based
on the previous month’s raw material costs, notably in Europe and
North America, effective prices for June are considerably higher
than they were in May. In China, on the other hand, selling values
respond more quickly to changes in input costs. MEPS figures for
that country, based on market prices in the third week in June, are
lower than they were four weeks earlier.
Moreover, there has been an increase in purchasing activity, in many
markets, in the past couple of months. This may be supported by
improving underlying demand or it could be driven by stock
replenishment and technical buying during a period of rising prices.
Producers in several countries have used these positive signs to
support small basis price increases, in addition to the soaring
alloy extras. Some mills are hoping for further increments during
However, as the price trend levels out, customers are less likely to
make speculative purchases. Furthermore, stock building has been
completed and business activity will slow in many parts of the world
during the summer holiday and shutdown period. Consequently,
suppliers may find it difficult to achieve further basis price
increases in the short term.
The reversal in the direction of nickel costs has arrested the rapid
rise in alloy surcharges for austenitic grades. Indeed, some
producers’ July figures for type 304 flat products are slightly
lower than those for June. This will only add to the usual, seasonal
lethargy in stainless steel buying.
Supply chain participants will be hoping that the positive sentiment
perceived in recent months is indicative of a real upturn in demand.
Order tonnages in the weeks following mills’ and end-users’ summer
stoppages will give some sign of the future direction of the market.
Source: MEPS -
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