UNITED STATES April 01 2015 9:01 AM
NEW YORK (Scrap Register): A rapid reduction in the cost of raw materials, most notably nickel, has led to a substantial cut in stainless steel prices in recent months, said MEPS International.
At least, this is the case in United States, or in countries where prices are denominated in US dollars.
As per MEPS, LME nickel cash figures plummeted from a high of US$16800 per tonne during December, to a low of $13920 per ton, during February - a decrease of more than 17 percent. As this drop was factored into alloy surcharges, transaction prices for grade 304 cold rolled coil, in the US, fell by 8 percent, between January and March. These price reductions have discouraged buyers at the service centres from placing forward orders.
However, in the European Union, the value of the euro dropped by around 10 percent, against the US dollar, during the same period. Consequently, the effect of the slide in LME nickel values was offset, in this region, by exchange rate movements. As a result, the changes in European alloy surcharges were minimal. To illustrate this point, transaction prices for grade 304 cold rolled coil, in Germany, expressed in euros, decreased by just 0.13 percent.
European stockists have, therefore, not been subject to the same devaluation of their inventories as those in the US. Accordingly, those making purchases in Europe should have been less pessimistic than their US counterparts about placing orders.
