Latest Stainless Steel News 04/08/2010

Thu 5 Aug 2010

Taigang hikes stainless prices as nickel soars

China's largest stainless steel producer, TISCO, raised its weekly stainless 304 and 430 domestic list prices by RMB 500/tonne ($74/t) this week. The increase, which was widely expected by the market, follows higher spot market prices on the back of strengthening nickel prices.

Spot market prices and buying activities have been resilient as nickel prices soar. The prices may continue their upward creep in August but the size of the increase may be limited. This is due to a concern over domestic overcapacity.

Three-month nickel prices on the London Metal Exchange finished at $21,500/50/t on 2 August, a strong increase of around $1,000/t from a week ago.

Taigang raised its 304 grade domestic stainless list prices by RMB 500/tonne ($74/t) last week after keeping them unchanged for five weeks. Its 430 domestic prices remained unchanged.

Taiwan's stainless prices move up in August

Taiwan's Yieh United Steel Corp. (Yusco) and Tang Eng Iron Works have increased domestic 304 HRC and CRC stainless steel prices by TW$2,500/ton for August.

The price hike is mainly because of higher nickel price and improving demand, according to market participants. Demand for stainless steel has improved as some clients begin to restock, adding that nickel prices are another reason behind the price rises.

Stainless steel prices are likely to be raised again for the second half of August, if nickel price continues to rise.

LME nickel stocks rise, price too

Nickel stocks reported by the London Metal Exchange have risen by 2,430 tonnes in the last four reporting days, to stand at 118,380t yesterday. However the price also continues to rise, standing at a two-month high of $21,415-21,420/t (cash) yesterday.

The stock rise results from a combination of factors, including the seasonal closure of European stainless steel mills, the seasonal re-opening of the Russian port of Dudinka – allowing the restart of nickel exports – and also the restart of Vale’s Sudbury mine following the year-long strike.

However, with the exception of Sudbury, the market largely prices these effects in, but in addition there has been a massive deficit in supply and demand, beyond the usual seasonality.

China has been destocking, with imports down 90,000t in comparison to this time last year and the LME stocks are down by more than 40,000t since the start of the year; so concerning the question of the market moving into surplus, it is unlikely given this deficit.

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