Latest Stainless Steel News 25/03/2010

Thu 25 Mar 2010

Higher prices reflect nickel's fundamentals

Nickel's cash prices return to above $22,000/tonne on the LME last week , mainly reflects the strength in primary nickel demand from the stainless steel industry and uncertainty over primary nickel supply.

China has been leading the recovery of the global stainless steel industry since the beginning of the year, with Chinese mills running at historical highs in Q1 with a solid order book for Q2 and a comfortable view on the domestic economy for the next 3- 6 months.

Based on reports from the major Chinese mills, it is forecast that the country’s stainless steel output this quarter will be a record 2.77mt. If sustained this would give an annualised 11m t in 2010.

In addition to the strength of the Chinese market, other Asian and the leading US and European stainless steel producers are also bringing back production following cuts last year as order books improve.

There are signs of a pick-up in demand, while stainless distributors are also increasing their orders in anticipation of rising stainless steel prices. With alloy surcharges due to rise in April, transaction prices will continue their upward movement.

TISCO keeps stainless prices unchanged for second week

China's leading stainless producer, TISCO, is keeping its 304 and 430 stainless list prices unchanged for the second week amid sluggish trading in the past two weeks.

Sellers had raised 304 offer prices on a few occasions in March but were forced to decrease them again due to a lacklustre response from buyers. Transacted spot prices of 304 HRC and CRC in Foshan have fallen by RMB 200-300/t since beginning March.

Traders are not overly concerned about the slide in prices however, noting that suppliers had initially got over-excited and raised prices in response to strengthening nickel prices despite slow demand. Industry watchers are predicting higher stainless prices in the near-term as nickel prices stay strong while prices of other raw materials like ferro-chrome, iron ore and scrap are expected to move higher.

European stainless steel flats to increase alloy surcharges

Alloy surcharges on flat rolled stainless steel in Europe will increase again next month, rising by around 20% on austenitic grades and about 9% on ferritics.

Nickel's cash price has exceeded $22,000/t for most of the four-week alloy cost monitoring period used to calculate next month's surcharges. Further increases in the price of ferro-chrome contribute to the upward movement, and certain grades are also affected by a slight lift in ferro-molybdenum prices.

Back to news