STAINLESS STEEL PLATE AND NICKEL PRICE FORECASTS FROM MEPS

Hot Rolled Plate type 316 transaction values moved up during June in both the EU and North America, but fell in Asia for the first time since December 2005. This difference in price developments is the result of the alloy surcharge mechanism in the West and also a large reduction in local selling values in China. The nickel price decline is making this situation worse.

Most deals are now being conducted as transaction values. The alloy surcharge is still a fact of life, but basis figures are being adjusted to compensate. This is expected to continue in July as the surcharge rises further. From August onwards, the recent nickel declines will have a negative impact on the alloy extra and, as such, stainless selling values in both the EU and North America. Transaction figures are forecast to fall in all areas through to the beginning of 2008.

Nickel prices plunged in June as the LME introduced new lending guidelines and stocks continued to rise. Values had been hovering around the $50,000 per tonne mark before the LME made their announcement. This sent figures plummeting by over 25 percent in just 2 weeks. Prices are set to continue moving downwards as the summer slowdown begins. Stainless steel production levels are expected to drop over the next few months resulting in lower demand for nickel. This should cause LME values to reduce to around $30,000 per tonne by the end of 2007. They are then forecast to stabilise during the first quarter of 2008 as demand begins to return.        03.07.2007

Source: MEPS - Stainless Steel Review - click here for a free sample copy.

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