Asian stainless mills withdraw offers as nickel surges
Global stainless steelmakers are scrambling to adjust their pricing levels, due to rapidly escalating nickel costs. Market participants report that several Chinese mills temporarily withdrew their offers while they evaluated their swiftly rising raw material outlay. Producers in other Asian countries also delayed providing quotations to local distributors, as they waited for pricing information from China.
Asian export offers to European buyers were also suspended, during the past few weeks. In recent months, imports from Asia have been unattractive to European buyers. This is mainly due to the EC safeguard quotas and antidumping investigations.
However, with rapidly rising European stainless steel prices and extending local delivery lead times, especially for 300 and 400 series flat products, overseas material may again be of interest to some customers.
Aside from rising prices, buyers around the globe are faced with soaring sea freight costs due to a lack of container availability. Congestion at ports is currently disrupting stainless steel deliveries, especially into Europe, from Asia. UK market participants report that several vessels destined for the UK were diverted to mainland European ports.
The transport situation between the UK and mainland Europe is increasingly fraught, as new coronavirus-related movement restrictions add to the continuing uncertainty surrounding EU-UK trade terms after December 31. Shipping costs are expected to remain elevated into the first quarter of 2021.
Nickel, and other stainless steelmaking raw materials that have been buoyed in recent weeks, are expected to remain firm, in the short term. Investors are becoming significantly more optimistic, with the announcement of the coronavirus vaccine rollout, in various countries.
In addition, production outages at nickel mines and soaring domestic demand in China have intensified concerns regarding potential supply shortages in the market. Consequently, it is inevitable that global stainless steel pricing will continue on an upward trajectory, in the coming months.