MEPS predicts a slow recovery in stainless steel prices

The trend in the global stainless steel market has been relentlessly negative over the past twelve months. Only a few minor monthly increases, reflecting fluctuations in the LME (London Metal Exchange) nickel price, increased the value of trades on a downward trajectory.

The average price of 304 cold rolled steel coils this month is nearly 28 percent lower than a year ago. The price values, if it is appropriate to put it that way, were quite stable, and underwent only a few small, mostly negative, adjustments. Prices remain close to unprofitable for European producers. In the EU, the price of 316 cold rolled steel fell 3.2 percent year on year. During the same period that nickel and molybdenum values ​​fell, surcharges for grade 316 fell more than 25 percent.

While raw material costs are projected to rise from their current levels in the next twelve months, the average stainless steel price over this period is likely to be significantly lower than last year. Transaction values ​​in Asia are projected to rise slowly, reflecting the cost of raw materials, and will peak in price levels in May 2016. After seasonal fluctuations, prices are forecast to decline slightly in the summer months.

Sales performance in Europe is still not expected to rise until the end of this year. A neat increase in transaction values ​​is expected during the first half of 2016, driven by a slight increase in raw material costs. Prices are unlikely to experience major gains as demand slows ahead of the traditional season of declining demand with the onset of summer.

North American benchmarks are forecast to remain largely stable, with a slight increase expected early next year. The transaction figures will reflect the impact of changes in alloy steels surcharges. It could also lead to seasonally peaking prices in May 2016.