FLAT FOURTH QUARTER
PREDICTED FOR STAINLESS STEEL MARKET – MEPS
According to MEPS, stainless steel sales have
been surprisingly subdued since the summer holiday season. Most
market participants predicted an upturn in demand during, what is
traditionally, one of the busiest periods of the year.
While a few niche sectors have reported strong results, most sellers
of stainless steel have found the past month, or two, very quiet
indeed. This, in turn, has had a restricting effect on selling
values. Both basis figures and surcharges were expected to
contribute to rising transaction prices in September and October. As
it transpired, basis values in Europe, for example, were little
changed, this month, and, notwithstanding the wishes of the mills,
substantial increases in October are unlikely.
Mediocre demand has, certainly, played a part in the situation. An
upturn in manufacturing activity in the developed world, which has
been anticipated for some time, has continually failed to
materialise. In fact, countries such as Sweden and Germany, whose
industrial activity has held up better than most, since the Global
Financial Crisis, are now showing signs of slowing down.
This has been exacerbated by the weaker-than-forecast nickel price
trend. Market participants were aware of a possible ban on
unprocessed ores by the Philippines – similar to that imposed
earlier this year by the government of Indonesia. This would
possibly lead to a global shortage of nickel in the medium term.
However, it was announced, in early September, that no such ban
would be enacted in the foreseeable future. This outcome
precipitated a negative outlook for nickel values, as the LME cash
figure fell by 13.5 percent in two weeks.
As a result, nickel costs decreased at a time when many people had
anticipated an upward curve. This has coincided with the recent
agreement of lower chromium prices for the fourth quarter. Although
next month’s alloy surcharges are slightly higher than September’s,
transaction values in October are likely to represent an
underwhelming high point until the, still-predicted, uptrend in the
first half of 2015.
Source: MEPS -
Review - September Issue
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