Events

Traditional, seasonal factors plus rising raw material costs brought up strong recovery expectation in stainless steel prices during 2019 second trimester.

A correct prediction was made by market participants on European ferrochrome contract increasing in the 2nd quarter. Thus, suppliers were encouraged for raising the nominal basis prices. February saw a rise in a majority of ex-mill transaction values for 300-series coils, even higher than the hike in alloy extras. This is a hopeful sign for producers that basis figures would come back to track that could represent profitable returns, for the mills.

European alloy surcharges (for austenitic flat products) increased substantially in March 2019 after the consistent fall since last peak figure in July last year. Regional mills proposed further increments to nominal basis values. On the other hand, buyer should consider that the latest rise in alloy extras is only as much as the market capacity with the existing moderate demand.

In the hot and cold rolled coil sector, alloy surcharges experienced steep rise, but were offset by the mediocre demand. Consequently, basis values softened in March. With further increases to alloy extras in recorded in April (& forecasted for May), US producers are likely to seek difficulties in lifting basis prices in the short run.

Small rises were recorded in the Far East for 300-series coil values. Growing raw material costs were tempered by subdued demand, high inventory levels and excess production capacity. The Tsingshan plant (Indonesia) continues expanding material availability, and apply downward pressures to regional price. MEPS predicts further marginal increase in Asian sales in the upcoming months.

Source: World Steel News & MEPS Stainless Steel Review