The global market for stainless steel is still waiting for more events
Growing protectionist trade fight and the increasingly volatile costs of raw materials are making companies more and more cautious in their purchases.
The prices of the stainless steel in the United States skyrocketed when the tariffs of Section 232 entered into force. American stainless steel manufacturers are benefiting today from large margins, but customers are already worried about having to buy and store material at a high price if something goes wrong. Meanwhile, the purchase price of the stainless steel wire in Europe is struggling to keep upward trend, in line with the growth of the European economy.
The average market price of nickel fell 5% compared to the previous month. There is also a sharp decline in steel scrap in August. As a result, alloy surcharges for the stainless steel may be moderated the next October. Anyway, the European steelmakers will try to keep the prices of the stainless steel, although it can be difficult to raise the prices if weak conditions of the market persist.
We think that trade war games in the United States are likely to continue to cause volatility in the short-term market. In addition, a constant increase in nickel demand in the future is expected linked with the electric car. In this sector we can expect a significant growth that we may see soon.
However, nickel inventories are falling rapidly, and the downward trend is likely to continue in the medium term. Of course, this will have an upward effect on the sales prices of stainless steel coils in the coming months.
The purchase prices of chromium began to fall in mid-July and continued its negative trajectory in August. This affects the ferritic grades. We therefore expect a reduction in the price of the chrome contracts in the fourth quarter of 2018. These contracts are traded quarterly.
The scenario we consider is that the average purchase prices of the stainless steel will probably decrease slightly during the rest of 2018 to slightly increase at the beginning of 2019.
Originally published at www.conecband.com.
Disclaimer: The content of this article reflects our view and is not a recommendation to buy or sell any asset. Each buyer must do his own analysis. Although we took all reasonable care in writing this post, it is possible that the information in it is incomplete or incorrect or may differ of what you know.
