Stainless Steel Me

Stainless steel producers throughout the world are succeeding in securing higher prices, although there appears to be no increase in underlying demand in most markets. The steady climb in the LME nickel figures has enabled suppliers to lift transaction values by applying their local mechanisms for accounting for variations in alloy expenditure. In addition, mills in many countries have also pushed up the basis element of their selling prices.

So, why have customers accepted higher payments when end-user consumption is not increasing? Firstly, producers have been selling at less than cost for some time. Now, they find that, as buyers are purchasing only for their immediate needs, sales volumes are not significantly affected by price movements. Moreover, since the onset of the current financial crisis, the mills have been restricting their output and stockists have been running down their inventories. Now, holes are beginning to appear in stocks and delivery leadtimes are stretching out to several months.

In Taiwan, India and China, government stimulus measures have brought about what could be considered real increases in demand and many of the producers in these countries have been operating at close to full capacity in recent weeks. Outokumpu, in Finland has also decided to lift output from the low levels in the first half of this year.

Rising nickel prices over the past ten weeks led to increases in input costs – pushing up selling values in June for all austenitic grades of steel. So far, this has generated no panic buying by customers. As a result of a recent ferro-chrome settlement, we expect $US 80 per tonne to be added to transaction values for all stainless grades over the next two months.

For latest updates on prices by region.

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