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MEPS predicts a Stainless Steel price upturn over next one year
Jun 2,2015 14:53CST
industry news
Source:SMM
The current condition and short-term outlook for the stainless steel market is rather mixed.

 

UNITED KINGDOM June 02 2015 9:35 AM
LONDON (Scrap Register): The current condition and short-term outlook for the stainless steel market is rather mixed. Demand varies by sector. Sales to the automotive supply chain remain quite buoyant, as they have been fairly consistent in recent years, said MEPS International in a snippet.
 
On the other hand, investment in the oil industry is very depressed, as it has been since commodity oil values started to fall, last year. Activity in other stainless steel-consuming segments is patchy, with geographical pockets of optimism dotted around the world. 
 
European stainless steel strip mills have rapidly-filling rolling schedules. Delivery lead times are stretching and there are murmurs of possible short supply in the autumn. Producers have achieved small basis price increases, this month, and further increments are mooted. However, these minor adjustments are almost insignificant in the light of the much larger fluctuations in alloy surcharges.
 
After falling in the previous month, a short-lived recovery in LME nickel values in late April and early May resulted in alloy extras for grade 304 material climbing again for June. The nickel commodity price has been on a downward trend again in recent weeks.
 
Many market observers predicted rising nickel values, this year, with the long-standing global supply surplus finally turning to a deficit. The main driver for this was expected to be China’s increasing demand for refined nickel, as that country’s stainless steel production continued to expand. Meanwhile, its supply of nickel pig iron (NPI) would be restricted by Indonesia’s ban on the export of laterite ores.
 
In reality, China’s output growth has decreased, in 2015, and the depletion of its Indonesian ore stocks has been slowed by blending, in the NPI production process, with inferior ore from the Philippines.
 
Furthermore, nickel prices are being held down by the very high level of LME inventories. The, already record high, stock figures were augmented, earlier this year, when material was moved into LME-listed warehouses, from other Chinese stores, following the Qingdao fraud scandal. Speculators are unlikely to support higher prices while such inflated stock levels persist.
 
Nevertheless, nickel miners continue to forecast the emergence of a deficit in supply in the short-to-medium term. This would result in a modest upward trend in nickel values during the coming twelve months.
MEPS
stainless steel price

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