Stainless steel suppliers hope to recover in 2019

Stainless steel prices, in particular sheet metal prices, showed different trends in traditional steel production regions in 2018.

In the United States, the introduction of section 232 quotas and tariffs in early 2018 had an immediate inflationary impact on stainless steel coil sales. Baseline values ​​for 304 cold rolled coils declined in the second half of the year, as did alloy surcharges. However, they remain slightly higher than at the beginning of 2018. In addition, transaction prices in North America will end the year higher than those recorded in January, while prices in Europe and Asia tend to decline.

In Europe, due to an increase in alloy surcharges from February to July, the value of transactions did not keep pace. Buyers were reluctant to pay the full increase. Consequently, most of the business was carried out using "efficient prices" rather than the established base-plus-premium-on-alloy mechanism. During this period, the nominal baselines, i.e. the transaction value, net of the alloy premium, fell to unusual and almost certainly volatile levels.

It was widely believed that when alloy premiums were reduced, effective prices would fall less sharply, and therefore nominal benchmarks would therefore return to “normal” levels. In fact, in the second half of 2018, the value of transactions fell by more than a decline in the value of individual alloys. The nominal base figures are now several hundred euros below the generally accepted breakeven point for cold rolled steel coils. European producers will look to a substantial rebound in stainless flat steel prices to get their operations back to profitability.

Asian prices have been much less volatile this year than elsewhere in the world. As a rule, fluctuations in sales figures are determined by changes in the cost of raw materials. Lately, manufacturers have tried to maintain stability in their local markets by minimizing price changes. In particular, Japan saw only moderate market changes in 2018 for 300 series cold rolled coils.