Stainless steel prices hit multi-year high in Asia

According to a report by MEPS International Ltd., MEPS Asia average 304 hot and cold rolled coil prices in April are at their highest level since August 2008. In recent months, the growth rate has accelerated, mainly due to the rise in the cost of nickel.

However, the rise in Asian stainless prices in April was muted by Covid-related lockdowns in China and currency fluctuations.

South Korea

The transaction value of cold rolled coils in South Korea has increased by 17% since the beginning of 2022, reaching a fifteen-year high. End users are reportedly unable to recoup the cost of inflated stainless steel prices.

Domestic manufacturer POSCO recently announced that the value of sales in May will remain stable in order to attract and support local customers. However, June prices are likely to rise in an attempt to offset the recent rise in commodity prices.

Japan

In Japan, flat steel prices rose by 30% year on year. This month, domestic mills achieved an increase in the production of austenitic grades by about ¥20,000 per ton.

Prices are currently at their highest level since June 2008. Further significant growth in local currency is expected in May due to the devaluation of the yen against the US dollar.

Taiwan

The largest growth in East Asia this year was registered in Taiwan. Domestic 300-series roll prices are up 63% year-on-year. More than half of this increase occurred in the first four months of 2022.

The concern that they will be left with expensive inventory limits distributors' buying activity.

China

Although China has recorded significant price increases since the beginning of the year, this increase was limited by weakening demand. Since March, the spread of the Covid-19 infection has had a significant impact on the production and consumption of stainless steel in the country.

Suppliers are reporting difficulty delivering materials to customers due to logistical issues related to lockdown restrictions.

MEPS forecast

MEPS' average stainless steel transaction prices in Asia are expected to rise slightly in dollar terms next month. Domestic price movements will vary throughout the region. Steelmakers will seek to recoup their rising input costs, but with varying degrees of success.

As the gap between local and international prices widens, export opportunities are likely to expand. This should help alleviate growing oversupply pressure in the region in the coming months.