Category Archives: Stainless Steel Prices

EU Safeguarding Measures Influence Stainless Steel Purchasing Behaviour

EU Safeguarding MeasuresThe EU’s recently announced temporary quotas and tariffs on steel imports, arising from the Commission’s safeguarding investigation, might have been expected to push prices of stainless steel upward, in the European market. However, some buyers have chosen to expand their placement of import orders, in the short term, to maximise their own intake of low priced material, before quotas are exhausted. This has the effect of reducing demand for locally produced material and, thereby, places downward pressure on prices.

This should be short-lived. Many stainless steel buyers are wary that, given the long delivery lead times on orders from, for example, the Far East, material ordered now could arrive in Europe after the appropriate quota has been filled and, therefore, incur tariff charges. Consequently, they are more likely to source their requirements from European mills – in turn, applying inflationary pressure, in the regional market.

Source: MEPS – Stainless Steel Review

Mixed Trend in EU Flat Product Steel Prices in July

Divergent Stainless Steel Price Trends Derive From Section 232

Stainless steel markets throughout the world have responded differently to the United States’ announcement, at the beginning of March 2018, of 25 percent tariffs on steel imports and 10 percent tariffs on aluminium.

Uncertainty persisted as temporary exemptions were granted to supplies from selected countries, until the end of May. A quota arrangement was agreed with South Korea. On May 31, the United States confirmed that tariffs will be imposed on imports from its NAFTA associates, Canada and Mexico, as well as the European Union effective from June 1.

In response, the European Commission has launched a safeguard investigation, in an effort to thwart the redirection of steel supplies, previously destined for the US market, into the European Union. This, like the US Section 232 action, is likely to lead to the imposition of import quotas or tariffs.

While some suppliers in Europe and Asia attempted to maximise shipments to the US, in advance of the application of trade measures, the attitude of most buyers and sellers has been cautious. Exports to the United States have declined. Meanwhile, we have many reports of producers elsewhere making competitive price offers in markets that they have not previously explored.

This has resulted in divergent price trends in the different regions. In the light of reduced import tonnages and the impending introduction of tariffs on future shipments, US domestic suppliers have met little resistance to substantial price hikes, in their home market.

Producers in Europe and Asia, conversely, have struggled, in recent months, to raise selling values, by even enough to cover the rising cost of raw materials.

Between February and May, MEPS’ North American average price, for grade 304 cold rolled coil, increased by 15.5 percent. During the same period, the corresponding Asian average rose by just 1.6 percent, in US dollar equivalent terms, while the EU figure dropped by 2.4 percent.

Source: MEPS – Stainless Steel Review

Global Growth In Stainless Steel Output To Continue

Worldwide crude stainless steel production, in 2017, reached an all-time high total of nearly 48.1 million tonnes. This represents an increase of 5 percent, compared with the year earlier figure. MEPS predicts that global output will grow by a further 5 percent, in 2018, to achieve a new record high mark of around 50.5 million tonnes.

USA

The introduction of tariffs or quotas, arising from the United States’ Section 232 action, is likely to alter the patterns of trade between the major stainless steel producing countries. Output in the United States grew by a healthy 11 percent, year-on-year, in 2017. We forecast more moderate expansion, this year.

South Korea & Taiwan

Production in South Korea and Taiwan continued its recovery, having slumped, following the Global Financial Crisis of 2008/9. Output increased by 6 percent, last year, in South Korea, to total 2.4 million tonnes. In Taiwan, production grew by nearly 9 percent, compared with the year earlier figure, to reach almost 1.4 million tonnes. Both countries are expected to record increases of around 4 percent, year-on-year, in 2018.

EU & Japan

Growth is more moderate, in the traditional stainless steelmaking centres of Japan and the European Union. Production increased at a modest pace in both markets, in 2017. Expansion is predicted to continue at a similar rate, in both places, this year.

China

In China, the annual growth rate in stainless steel supply slowed, to 4.7 percent, in 2017, after years of rapidly increasing output. Nevertheless, at 25.8 million tonnes, the country produced over 53 percent of the world’s crude stainless steel, last year. A further increment, of around 4 percent, year-on-year, is forecast for 2018.

Stainless steel production continues to climb most steeply in the “Others” category. India is becoming a major part of the global supply chain, while a new facility in Indonesia, commissioned last year, will also contribute significant tonnages, in the future.

Source: MEPS Stainless Steel Review

 

Section 232 Probe Creates Chaos In Global Steel Industry

Section 232 Action Creates Ripples Throughout Stainless Steel Markets

Divergent trends have emerged, in worldwide stainless steel markets, in the wake of the United States government’s Section 232 deliberations. Acting on the recommendations of the report arising from the investigation into the effect of foreign-produced steel on US national security, President Donald J. Trump announced a tariff of 25 percent, to be applied to all steel imports into the United States, effective from March 23.

American stainless steel producers and distributors alike acted swiftly, applying increases to their selling prices. While this can be seen as taking advantage of the rising cost of material from overseas competitors and a predicted tightness in the supply of stainless steel, it was hoped that this move would discourage panic buying and, to some extent, avert that shortage.

Agreements were soon made with many of the United States’ leading trade partners, granting them exemption from the immediate imposition of the Section 232 tariffs. However, in a number of instances, the action is merely delayed, pending further negotiations. Consequently, US customers and traders remain reluctant to place orders with suppliers from certain countries, for fear that tariffs could be re-imposed by the time material is delivered. In this environment, it should be possible for local sellers to maintain their elevated prices, in the near term.

In other regions, this development has raised the spectre of a glut of stainless steel, as some producers lose their current outlets in the United States. Market prices have weakened, accordingly.

In Europe, despite encouraging domestic sales volumes, in the early part of this year, and a perception of strong underlying demand, stainless steel flat product basis values slipped, in March. They could decline further, in April.

Producers in South Korea were unable to secure, in March, the increases that they thought were justified by earlier rises in raw material costs. LME nickel values are believed to have passed their peak, for the current cycle. Chinese stainless steel coil market prices have been sliding, in recent weeks.

Source: MEPS – Stainless Steel Review – March 2018 Issue

People also read: Further Uncertainty Created by Section 232 Exemptions

Further Stainless Steel Price Rises Imminent in the US After Section 232 Announcement

In February, US stainless steel prices increased for both flat and long products. Rising mill input costs resulted in moderate gains in stainless steel transaction values, worldwide. However, the price hikes recorded in North America were more substantial than those in other regions. No doubt, the upward trajectory witnessed over recent months can be attributed, at least in part, to concern surrounding the outcome of the Section 232 investigation.

The growing cost of nickel, chromium and molybdenum will, almost certainly, put further upward pressure on stainless steel transaction values, through to the second quarter of this year. Rises in alloy surcharges have been announced for March deliveries and additional increases are anticipated for those in April. Moreover, reductions in basis price discounts are expected, in the near future, as local producer confidence grows, following Thursday’s Section 232 announcement.

The statement last week, by President Donald Trump, of a 25 percent tariff on all steel imports, has been met with a mixed response by the local market. Whilst domestic steel manufactures are praising Mr Trump for his decision, buyers in the downstream supply chain have concerns regarding the potential for a shortfall in supply, as well as further price increases. Discussions of counter measures by representatives of countries, worldwide, are already emerging. The risk of a trade war looms.

Source: MEPS International Ltd

Rising Costs and Section 232 Drives US Stainless Steel Prices Upwards

Global stainless steel transaction values increased, in February, reflecting the rising cost of raw materials – in particular, nickel and ferromolybdenum. Buyers are, generally, optimistic about underlying demand but not sufficiently to agree to price hikes that represent more than the increase in the mills’ input expenditure.

Producers in the United States announced further discount cuts – or basis price rises – for flat products, to be effective from 1 March. In the light of the current supply/demand balance, it may be considered difficult for suppliers to justify this move, following other, recent increases. Indeed, end-users are already expressing their displeasure with the upward trend in transaction values.

Sellers, though, may be encouraged by the prospect of tariffs or quotas being applied to imported material, as a result of the recent Section 232 investigation. The report found that the United States’ government would be right to protect its domestic steel industry, on the grounds of national security. The U.S. President has been presented with a range of recommended actions, including tariffs or quotas to be applied to all, or a selected group of countries. He must decide, by 11 April 2018, which, if any, of these measures to implement.

Whilst it is not definitively clear that such measures would apply to any, or all, stainless steel products, the potential effects are already being seen. Buyers are reluctant to place orders on overseas suppliers – especially from the countries that may be subjected to the most severe restrictions – mindful that tariffs could be in place by the time this material arrived.

The implementation of these measures would lead to a realignment in international stainless steel movements. Producers in East Asia, in particular, would need to seek out new markets, to replace the tonnages currently sold to the United States. A number of European mills also make regular shipments, across the Atlantic Ocean.

Source: MEPS – Stainless Steel Review – February 2018 Issue