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EU Stainless steel prices set to fall further in the next few months |
| WRITER |
administrator |
DATE |
2009-02-03 10:26:19 |
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EU Stainless steel prices set to fall further in the next few months
02.02.2009
Alloy surcharges charged by most stainless steel mills in the EU will decline over the March/April period. This will be the result of lower ferro-chrome contract prices. We estimate that the figures used by the majority of steelmakers for grade 304 cold rolled sheet will fall to near €800 per tonne. This is a decrease of €150 on the January average value.
It is reported that ferro-chrome contracts have been settled at approximately $US0.8 per pound. This compares with the current number of just below $US2. Decreases in ferro-chrome costs affect all grades of stainless steel. This is unlike fluctuations in the nickel market which mainly influence austenitic grades.
The prospects of lower alloy surcharges and the resultant falls in transaction values in the EU will do little to boost demand for stainless steel in the region in the short term. It is likely that, wherever possible, customers will hold back from purchasing for the next few months. This, despite a modest upturn in the LME nickel price over the past month.
Stainless steel prices in the US are not expected to fall at the same rate as in the EU. A decrease in the spot ferro-chrome price has already been factored into alloy surcharges in that country. However, a reduction of $US100 per tonne in the alloy surcharge for type 304 sheet is a possibility over the coming months.
The impact of declining chromium costs has not been fully passed on to customers in many Asian countries. Modest decreases in transaction values are a distinct possibility in this region also.
Resource from MEPS |
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