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News Release from: MEPS (International)
Edited by the Manufacturingtalk Editorial
Team on 02 March 2007
Alloys price surge pushes up SS costs
As the average nickel price reached a new record in January 2007, stainless steel producers anticipated higher alloy surcharges for austenitic grades soon.
The record average nickel price in February at above US$41,000/tonne will result in substantially higher alloy surcharges for austenitic grades of steel in the near term In the US, the surcharge for type 304 cold rolled coil will top US$3,700/tonne in April
This article was originally published on Manufacturingtalk on 9 Oct 2006 at 8.00am (UK)
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A different method of calculating the surcharge applies in the EU and this month's nickel price will, we estimate, push it to over US$3,500 (EUR 2,600)/tonne in May for the same product.
It is highly likely that the mills in these two areas will not be able to pass on the full alloy surcharge to their customers without considerably discounting the basis prices.
Sentiment in both regions has changed in recent weeks as the threat from low priced imports has now been realised.
Destocking is a feature of the US market.
Substantial oversupply has developed and customer orders on the local mills are drying up.
Delivery lead times are already relatively short.
Buyers are unlikely to accept current basis figures plus the increased alloy surcharge for austenitic grades for future orders.
Competitively priced imports are available.
The Italian market is already awash with low priced imported material, mainly from the Far East.
This is likely to filter into other parts of the EU.
Availability across the region is now much easier.
We sense that, with excess in the market and customers having reasonably high stock levels, they 'smell blood' and will be demanding lower basis prices for new orders.
* Source - MEPS Stainless Steel Review.
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