STEEL PRICES IN TURMOIL AFTER COLLAPSE OF NICKEL ON LME
Western stainless steel producers of strip
mill products have temporarily abandoned their traditional basis
plus surcharge mechanism for selling their material. Most EU and
US mills are now quoting only transaction (effective) figures. This
is, principally, to disguise the discounts necessary to obtain orders
after the fall in the price of nickel since early June.
Technically, surcharges in July for grade
304 increased by around 5 and 3 percent in the EU and US, respectively.
With the prospect of them falling over the next two months by almost
€750 and $US1400 per tonne it is not surprising that customers
are refusing to pay the current inflated figures. The alloy surcharge
is almost meaningless in negotiations at this time.
Mill orders have dried up. Many producers
have plans to cut output in the short term but are pushing material
into stock and selling at substantially discounted levels to generate
the limited business available.
Western stainless steelmakers are reluctant
to give up the alloy surcharge mechanism which has served them well
over the last decade. They continue to publish official figures
for July and August deliveries, despite the fact that they will
not be used for most deals. As a result, we will be publishing the
quoted surcharge values in our tables.
Source: MEPS - Stainless
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