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ESCALATING TRADE TENSIONS DISRUPT GLOBAL STAINLESS STEEL MARKET-The 20th China(Guangzhou)Int'l Stainless Steel Industry Exhibition
9/12/2018 不銹鋼展-不銹鋼展會-Stainless Steel Exhibition |
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The global stainless steel market is, currently, unclear. Growing trade concerns and volatile raw material costs are causing market participants to become increasingly apprehensive in their purchasing decisions. Prices in the US soared, following the introduction of Section 232 tariffs, while transaction values in the EU and Asia struggled to move up in line with rising input expenditure. Buyers are now trying to assess the impact on stainless steel prices around the world, in the coming months.
US producers are benefiting from good margins, but stockists and traders are concerned about being left with high priced stock, if the US market falters.
The average LME nickel price, during the reference period for the EU and US September surcharges, fell by 5 percent, compared with the previous month’s figure. The depreciation of the Turkish lira resulted in reductions in iron and steel scrap costs, in August. Consequently, alloy surcharges will decline, next month, for all grades researched by MEPS. However, European mills will attempt to keep stainless steel transaction prices stable, to bring nominal basis values back to more reasonable levels. This may prove difficult if weak market conditions persist.
Talks between low-ranking government officials, from the United States and China, eased tensions and helped to boost nickel prices, following the mid-month slump. Nevertheless, restrictive US trade policies are likely to continue to cause volatility in the market, in the near term.
A steady increase in nickel demand is anticipated, particularly from the electric vehicle sector. However, significant growth in consumption from the non-fossil fuel car sector is expected to take many years to develop. Nonetheless, inventory levels for class 1 nickel, held in LME warehouses, have been falling rapidly, this year and now stand at around 340,000 tonnes. They peaked at over 470,000 tonnes in the middle of 2015. This was partly due to stockpiling in advance of the growing need for this type of nickel, which is also used in battery production. However, stainless steel mills can utilise lower grade ores (converted into nickel pig iron) and scrap in their furnaces.
The downward trend in LME inventories is likely to continue in the medium term. This is forecast to have a positive effect on nickel and stainless steel selling figures, in the next twelve months.
Chinese spot chromium prices began to fall in the middle of July and continued their negative path, in August. Market values in the EU and US also weakened, of late. Further downward movement is expected, in the near term. This, coupled with the appreciation of the South African rand against the US dollar, is forecast to result in a reduction in the fourth quarter chromium contract price. The settlement figure is due to be agreed in late September.
Molybdenum values increased, this month, because of rising global oxide costs. Prices are expected to strengthen further, after the summer holiday period. Demand in the molybdenum market should improve, in early 2019. This is likely to put further upward pressure on prices.
MEPS World average stainless steel transaction prices are forecast to weaken slightly during the remainder of 2018. We predict a modest pickup in selling figures, early in 2019, with raw material costs moving upwards, in that period. However, the rate of growth in demand for stainless steel is expected to decline, next year. This, coupled with competition from new low-cost producers, is likely to restrict the size of any price increases, particularly in Asia.
不銹鋼展-2019第二十屆廣州國際不銹鋼工業展-效果最好的不銹鋼展會-The 20th China(Guangzhou)Int''l Stainless Steel Industry Exhibition
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