[SMM Analysis] Overview of the Stainless Steel Market Outside China: Resonance of Overseas Policies and Cost Drivers

Driven by the combined impact of macro policies and geopolitics, the stainless steel markets outside China saw a marked upward shift in the cost center. Indonesia’s decision to impose tariffs on nickel and coal exports, together with the implementation of Europe’s Carbon Border Adjustment Mechanism (CBAM), directly ignited bullish sentiment across the raw material supply chain, leading to firm Indonesian export offers and a sharp surge in European alloy surcharges. Under strong cost-side pressure, steel mills across many parts of Asia raised list prices intensively. However, overseas end-use demand showed clear structural divergence, with Japan and South Korea remaining resilient while Taiwan, China came under pressure. As the rapid price rally in the earlier stage triggered downstream fear of high prices, procurement is currently strictly limited to rigid demand. Looking ahead, the specific implementation details of Indonesia’s tariffs and the verification of substantive demand will become the core variables shaping the futures. In the short term, markets outside China are expected to hover at highs amid a cautious wait-and-see mood.

I. Macro Environment and Policy Resonance

The global stainless steel market is currently in a period of wild swings driven by policy, with geopolitical conflicts and trade barriers causing a significant shift in the cost center of markets outside China. Recent geopolitical conflicts triggered tight global energy supply and high oil prices, intensifying inflation and economic growth pressure in energy-importing countries. To ease domestic budget pressure and further force an upgrade in the resource value chain, Indonesian President Prabowo formally approved tariffs on nickel and coal exports. This macro control fundamentally ignited bullish sentiment across the raw material supply chain. Meanwhile, the European market is deeply feeling the multiple shocks of green trade barriers. The EU’s Carbon Border Adjustment Mechanism (CBAM), which officially took effect at the beginning of this year, combined with high local energy prices and surging procurement costs for ferrochrome, drove April alloy surcharges for chromium-based stainless steel in Europe up by as much as 5.4% in a single month. This marked a profound shift in global stainless steel trade, from pure competition over production costs to a broader contest over how to cope with complex barriers such as carbon emissions.

Figure 1. Review of FOB Indonesia Stainless Steel Cold-Rolled Prices

II. Overseas Supply-Demand Pattern and Market Game

Driven by strong cost-side support, the overseas supply side showed a clear willingness to hold prices firm. Indonesia’s FOB export offers for stainless steel remained firm at highs, with 304 cold-rolled and 316L cold-rolled stabilizing at around $2,052.50/mt and $3,852.50/mt, respectively. Affected by disruptions in the supply of Indonesian high-grade nickel ore and rising local power costs, steel mills across many parts of Asia raised list prices intensively. Multiple steel mills in Taiwan, China sharply raised prices for the 316-series and 304-series by NT$4,000/mt and NT$2,000/mt, respectively, while steel mills in Japan and South Korea also followed with defensive price adjustments. However, behind the strong price push on the supply side, overseas end-use demand showed significant structural divergence. The Japanese market remained resilient with solid support from the semiconductor and automotive industries, while South Korea’s booming shipbuilding sector directly boosted trading activity in 316-series products. By contrast, Taiwan, China, which is highly dependent on exports, still faced considerable pressure in taking orders. As earlier list price increases were too rapid, downstream buyers outside China are now showing strong fear of high prices, and the overall procurement pace is strictly limited to rigid demand, leaving market trading mired in a stalemate.

III. Market Outlook and Core Variables

Looking ahead, the core pricing logic of the stainless steel market outside China is expected to continue revolving around the game between strong cost-side support and demand verification. In the short term, the finalized tariff rate for Indonesia’s nickel export tariffs will become the biggest macro variable shaping futures sentiment, while the reshaping effect of Europe’s CBAM on global flows of semi-finished products will continue to unfold. Overseas steel mills’ list prices are expected to have further upside in April, but whether high costs can be smoothly passed through to downstream users will hinge on actual restocking by international traders and end-users. Before substantive demand is fully verified and current high-priced resources are effectively absorbed, the stainless steel market outside China is expected to fluctuate at highs amid a cautious wait-and-see mood.