STEEL GRIPS online - Asian average stainless steel prices

home

STEEL GRIPS online
ISSN 1866-8453

Last updated:
________________
Sep 3, 2010

Search STEEL GRIPS

business news > steel prices

meps:
Asian average stainless steel prices - latest forecasts

Feb 3, 2010

Our Asian stainless steel forecasts are little changed from December 2009. An anticipated hike in alloy surcharges for February 2010 will, almost certainly, result in a significant hike in selling figures for all austenitic products this month. Sales volumes are expected to improve as distributors refill depleted inventories. Further rises in transaction values are predicted through to the middle of 2010 as raw material costs escalate. Shortages could develop due to low stock levels throughout the supply chain. This should help mills to force through basis advances, pushing effective prices higher. However, poor final consumption will probably limit the size of any increases in 2010.

The monthly average cash nickel price is on target to climb by almost $US1500 per tonne in January 2010. This is despite stock levels held in LME warehouses moving to an all time record high of over 162500 tonnes. Nevertheless, we forecast further increases in nickel values in the near term. Workers at Xtrata's Sudbury works in Ontario may strike shortly. This, coupled with the current walkout at Vale Inco, would result in a total of 11 percent of the worlds nickel supply being out of service. Nickel inventories should, therefore, begin to fall. Demand from stainless steel producers is also expected to grow during the first half of 2010, adding to the upward price pressure. However, oversupply could return to the market by the third quarter. Consequently, a reduction in nickel values is predicted later in the year.

The rise in stainless steel prices is expected to come to an end over the summer period. Re-stocking by distributors is likely to be completed during the second quarter. Purchasing activity will, almost certainly, start to decline. However, increased production by local mills may create oversupply at this time. Transaction values are, therefore, forecast to stabilise during the third quarter. Declines in raw material costs in the second half of the year could then lead to some price weakness developing towards the end of 2010.

MEPS