STEEL AND NICKEL PRICE FORECASTS FROM MEPS
HOT ROLLED STAINLESS TYPE 304
EU Average Stainless Steel transaction prices
have now entered the path to the abyss. Basis figures have been
sacrificed in a month (July) which has seen most deals concluded
using only the effective price. This could continue in the short
term as alloy surcharges remain at the mercy of nickel price fluctuations.
Hot Rolled Coil figures are expected to suffer
more than plate because this market is weaker and under more pressure
from imports and higher inventory levels. Hot Rolled Plate prices
are, however, now beginning to show signs of softness. Falling alloy
surcharges from August onwards should result in transaction values
for both products recording significant drops into the fourth quarter
of this year. The decline in nickel prices is forecast to ease after
the Summer, which should help to stabilise the stainless market
by early 2008.
Nickel prices moved lower in July as they
fell further into their deep descent. The July monthly average is
set to be around $US8,500 per tonne lower than June's figure. Values
are now forecast to go below the psychological $US30,000 per tonne
in August as stocks on the LME continue to rise. There is still
the possibility for another severe drop in the cost of nickel. Stability
should return to the market later this year as production cuts from
stainless steel producers over the Summer months come to an end.
New nickel capacity, due on stream later this year and in 2008,
is expected to prevent values rising dramatically before the end
of the forecast period. 01.08.2007
Source: MEPS - Stainless
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