Changing Parameters in World Stainless Steel
World stainless steel markets are in a state of transformation, due to shifts in
the established patterns of supply and demand. This has resulted in diverse
production trends, across different regions. Moreover, pricing has become
detached from raw material costs.
The latest crude stainless steel production figures, from the International
Stainless Steel Forum, show global output growing by 3.4 percent, in the first
three quarters of this year, compared with the same period in 2018.
However, within these numbers are significant variations. Chinese output rose by
11.7 percent, year-on-year, in the nine months surveyed, while production fell
by 7.2 percent, in the European Union, and by 7.5 percent, in the United States,
during the same timeframe.
In recent years, the supply of nickel – a major element in stainless steel
costing – has been disrupted by government trade restrictions in major producing
countries such as Indonesia and the Philippines. Furthermore, the use of the
metal in batteries for electric vehicles, has reduced stainless steel’s
influence as the main demand factor in nickel pricing.
Consequently, in a period when stainless steel consumption has been mediocre,
nickel pricing has soared. The LME nickel cash value on December 19, 2019, was
30 percent higher than the figure exactly one year earlier. This is partially
offset, in mill raw material outlay, by reduced chromium unit costs.
However, the December transaction price for grade 304 cold rolled coil, in
Germany, was only 2.7 percent above the figure in 2018. In the United States,
the corresponding increase was 4.3 percent, year-on-year. Surprisingly, in
China, where production continues to boom, the latest price is less than one
percent more than the value recorded one year ago.
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