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Stainless Steel prices set to stabilize after a year of growth
Mar 1,2017 10:14CST
industry news
Alloy surcharges for grade 304 flat products in Europe and North America will decline marginally for March contracts, according to MEPS.

UNITED KINGDOM February 28 2017 8:41 PM

LONDON (Scrap Register): 
This is because the average LME nickel prices during the reference period, were slightly lower than those during the previous month. Producers may try to lift basis figures in order to maintain stable transaction values. Ex-mill prices in China and Taiwan receded, this month, as purchasing activity levels were disappointing, following the Lunar New Year holidays. 
Although these figures suggest a slowing in the most recent upturn in stainless steel prices, sellers will be encouraged by the positive trend displayed during the past twelve months. 
February’s transaction figure for type 304 cold rolled coil in Germany is over 33 percent higher than that recorded at the same time last year. The value reported in China, this month, represents a similar increase, compared with the figure in February 2016. An even greater year-on-year advance, of more than 40 percent, is shown by the price reported for the United States, in February.
Raw material costs are an important factor in these increases. The LME nickel monthly average cash figure, for this month, is estimated at US$10600 per tonne – a gain of more than 27 percent, compared with the number for February 2016. 
Furthermore, the European quarterly ferrochrome contract price, for the first three months of this year, is nearly 80 percent higher than the figure for the same period, in 2016. This number is now used in the calculation of alloy surcharges in North America, as well as in Europe.
The leap in ferrochrome values, for the current trimester, will represent a high point in the current cycle, with prices forecast to soften, during the coming year. Nickel costs, on the other hand, are expected to continue on an upward trajectory. The situation regarding mine closures, in the Philippines, is ever-changing but our belief is that it will continue to contribute to supply tightness.
Our research reveals an optimistic outlook from many parts of the global stainless steel supply chain. Underlying demand is perceived to be strong, particularly in Europe and North America. Conversely, trade cases against Asian stainless steel producers, in many parts of the world, have resulted in oversupply in the Far East.
Falling chromium costs are expected to offset rising nickel values, over the next twelve months. With basis numbers predicted to be quite stable, we forecast little change in global stainless steel transaction prices, in the coming year.

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