Latest Stainless Steel News 09/06/2010

Thu 10 Jun 2010

TISCO cuts local austenitic prices by another $146/t

China’s largest stainless steel producer, TISCO, has cut austenitic stainless steel prices by another RMB 1,000/tonne ($146/t) this week. This is line with weak demand, softening nickel prices and falling stainless spot market prices.

Austenitic and ferritic spot prices in south China’s Foshan market fell by RMB 700-1,100/t and RMB 500/t respectively last week. Offer prices for 304 and 430 materials in Foshan slipped by another RMB 400-800/t early this week with trading remaining quiet.

Traders expect further softening of nickel prices last week to reduce demand further. Three-month nickel prices on the London Metal Exchange finished at $18,470/t on 8 June, down around $2,200/t from a week ago.

Stainless output cuts in Asia

While most major stainless producers in Asia have not officially announced output cuts, many are reporting slowing orders. This could be a precursor to production cutbacks that may start as soon as this month.

In China, the country's largest stainless maker, TISCO reports that it may possibly cut production this month as stainless demand and prices have plunged recently. TISCO's May production was still strong at around 210,000 tonnes of stainless, compared with 180,000t in February.

June output at Baosteel could fall below 105,000t – a level the steelmaker has maintained for most of this year – as the drop in nickel prices has discouraged buyers from placing orders.

Taiwan’s largest stainless steelmaker, Yusco, plans to produce less at 76,000 t this month, compared with 85,000 t in May, due to slower demand. While domestic demand is still relatively stable, export demand – particularly from Europe – has weakened. Yusco’s competitor, Tang Eng, began cutting production in May by around 30%.

After holding at above $21,000/t for the most of May, three-month nickel prices on the London Metal Exchange started falling last week to finish at $18,470/400/t on 8 June. This is expected to further curb stainless trading in an already quiet market in Asia.

Stainless buyers defer orders as nickel price slides

At the end of trading on Tuesday, nickel reached a low of $18,412 (cash) and $18,470/t (three-months) on the London Metal Exchange. This is the lowest it has been since early-February. This fall fits with the general sentiment and is not out of line with other base metals.

A major stockholder of stainless steel reports that it has held back on ordering as a result of the falling nickel price and its knock-on effect on the alloy surcharge. It moved its usual June order to July, and is even considering pushing it back further to August.

Another stainless steel stockholder says that it will be running down current stock levels before buying and will be waiting to see where the nickel price goes over the next three weeks.

Back to news