Stainless steel prices set to reach peak

The price boom in the global stainless steel sector is now under serious threat.

The price boom in the global stainless steel sector is now under serious threat.

Several factors are coming together to indicate price weakness in the future.

Asian transaction prices are extremely low compared to those in Western Europe and North America.

Chinese customers are not able to pay the current inflated prices being charged elsewhere in the world as speculators in the nickel market drive prices ever higher.

In other countries of Asia, the mills do not have established alloy surcharge mechanisms and have difficulties in recovering the escalating input costs of nickel and chromium.

Consequently we can now see a large disparity between prices in different parts of the world.

Asian stainless steels (particularly Chinese) are being exported at competitive prices to all the major consuming countries.

In the EU and US, distributors have built up their inventories of competitively priced material and are now off loading material into the market.

As a result, orders on local mills are starting to dry up as customers can obtain cheaper products on short delivery times.

The substantial price discrepancy between Asian and EU supplies cannot be ignored.

We detect a high degree of uncertainty in Western stainless markets.

Both distributors and end users are reluctant to build up stocks of locally produced material - particularly in standard grades and sizes.

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