Ferritic stainless steel prices set to move even higher

Fri 16 May 2008

The MEPS World Average price for type 430 cold rolled coil in April is at an historic high. The figure is forecast to rise to near $US2500 in June this year. This equates to a, year on year, increase of 34 percent. The key driver for this gain is a hike in mill input costs – mainly ferrochrome. Its price was expanded from $US0.85 per lb in mid 2007 to around $US2 in recent agreements with producers.

We estimate that in June 2007 the chromium cost in the manufacture of 430 grades was at least $US340 per tonne of steel. In June this year the figure will be in excess of $US800 per tonne – an increase of $US460. Over the same time frame, ferritic selling prices have moved up by around $US660.It would appear that there are very few signs of any reduction in the ferrochrome price in the near term. In fact, further increases are anticipated – pushing stainless steel prices even higher, irrespective of market forces.

However, we should not forget that the austenitic grades are also seriously affected by the rising cost of ferrochrome and ferrous scrap. The popular 304 specification contains a similar amount of the metal to the 430 type. The input cost increases outlined for ferritics apply equally to the austenitics. However, nickel prices have been slipping of late – offsetting, to a degree, the chrome figures. – Meps

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