Slow recovery in Stainless Steel prices predicted: MEPS

UNITED KINGDOM September 01 2015 6:13 PM     

LONDON (Scrap Register): The  trend in MEPS world average stainless steel prices has been inexorably negative  over the past twelve months. With only a couple of very minor monthly increases,  reflecting fluctuations in the LME nickel figure, transaction values have  followed a downward trajectory. The average price for 304 cold rolled coil, this  month, is around 28 percent lower than number recorded one year  ago.

Basis values, where applicable, have been quite stable, with only a  few small, mostly negative, adjustments. They remain close to the producers’  breakeven figures.

The EU cold rolled, type 316, basis price has  decreased by 3.2 percent, year-on-year. During the same period, as nickel and  molybdenum values have plummeted, alloy surcharges for 316 grades have fallen by  more than 25 percent.

Although raw material costs are predicted to grow,  moderately, from their current levels, in the next twelve months, the average  over that period is likely to significantly lower than during the past  year.

Transaction values in Asia are predicted to rise slowly, reflecting  the cost of raw materials, reaching a peak level around May 2016. Following a  seasonal pattern, prices are forecast to slip during the summer  months.

Effective selling figures in Europe are expected to continue to  soften, month-on-month, until the end of this year. Gently rising transaction  values are foreseen during the first half of 2016, driven by raw material costs.  Prices are likely to weaken as demand slows in advance of the traditional summer  shutdown season.

North American basis values are predicted to remain  mostly stable, with one small increase anticipated, early next year. Transaction  figures will, thereafter, track the changes in alloy surcharges. This is likely  to result in seasonal peak prices being reached in May 2016.