Material Hikes Prompt Stainless Steel Recovery
The recent upturn in raw material values has spurred
stainless steel producers to introduce price increases – in some cases, over and
above the amount necessary to cover the rise in mill input costs.
LME nickel values have been on an upward trend, since early January.
Nevertheless, the increase was insufficient to bring about an uptick in European
alloy surcharges for austenitic stainless steels, in February. This, because
costs for chromium, molybdenum and steel scrap fell, during the calculation
This means that the surcharges for nickel-bearing grades, in Europe, had
decreased for seven consecutive months. During this time, nominal basis values –
the difference between the effective price and the alloy surcharge – having
plummeted in the first half of 2018, as surcharges soared, failed to recover in
the manner that market participants expected.
However, while alloy extras dropped again in February, effective prices for
austenitic flat products, in Europe, remained stable or, in a few cases,
increased. This represents an upturn in nominal basis figures. Alloy surcharges
will rise again, in March, and European producers are predicted to push for
further price hikes, in excess of the changes to alloy extras. This turnaround
has been anticipated for some time, as mills have been selling at values which
were, clearly, not covering their production costs.
In the United States, the leading stainless steelmaker, North American
Stainless, recently announced basis price increases, for bars and hot rolled
plates, effective March 1. However, no such proposal has been made, at the time
of writing, with regards to coil products. US producers have less requirement
for price increases than their European counterparts, because trade measures,
such as antidumping duties and Section 232 quotas and tariffs, have kept US
domestic values at a relatively high level.
Chinese market prices, which tend to respond quickly to changes in raw material
costs, took a positive turn, in February, following the Lunar New Year
celebrations. Stainless steel producers in South Korea and Taiwan, achieved
moderate hikes, for February contracts. Their intentions to seek further
increases, in March negotiations, have already been indicated. Japanese market
values have been stable, for many months. Local suppliers’ efforts to apply
increases met with very limited success, in February. However, MEPS expects them
to continue to press for price increments, in the coming months.
Source: MEPS -
Stainless Steel Review - February 2019 Issue
Also See: EU -
Stainless Steel Price Table
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