STAINLESS 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

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 Steel Review - click here for a free sample copy.

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