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| Industry News |
| Stainless steel prices falling again due to weak demand at the end of 2008 Go back |
| 2009-10-30 12:56:21 |
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| Stainless steel prices falling again due to weak demand at the end of 2008 Go back
Stainless steel prices continue to decline, not only because of falling demand and collapsing surcharges but also because buyers have stopped purchasing any product at this moment.
China’s major stainless steel producers have continued to cut production in spite of the low prices. In fact, the base price for type 304 has dropped significantly, by over 25% in the November period. Not surprisingly, the stainless steel price will continue to decline in December with weak demand at the end of 2008. Major stainless steel producers such as Baosteel and TISCO have announced that they will only produce materials based on order contracts on hand in December, in order to minimize losses. Taiwan’s YUSCO will try to cut its export prices in order to regain some orders.
On the other hand, austenitic (carbon-iron) stainless steel price continues to fall in the Japanese market as well as ferrite due to continuing weak demand. Actually, the price gap between austenitic and ferrite grade stainless steel have fallen by around two thirds from its level at the beginning of this year. While nickel prices were soaring, many stainless steel producers try to shift from Austenitic to ferrite in order to reduce production costs. Meanwhile, Japanese stainless steel producers do not like to shift often from one product to another. But if the prices of nickel continue to decline, it will definitely have a long term effect.
US stainless steel prices will also face a recession situation with production cuts and a sluggish market in the December period. Many service centers never expected to see the prices drop sharply, and nobody is buying anything unless it is for a specific job in hand. In November, base prices remained unchanged, but both base prices and surcharges are likely to drop in December. For January in the new year, the price is expect to drop even more.
For market conditions, as we know, stainless steel prices are expected to fall further along with alloy surcharges in early 2009. Obviously, we will see lower output win reaction to lower demand for while, so end users will place orders only when they are able to use materials immediately.
European surcharges are also set to be cut due to falling raw materials prices. ThyssenKrupp and Outokumpu have cut their alloy surcharges more than €100 per ton this month, compared to last month. Currently the stainless steel domestic market has suffered from the falling nickel and surcharges, along with weaker demand. In fact, European mills are trying to export materials in order to reduce stock levels by dumping their materials in Egypt and Turkey.
With the current global financial situation, business investment is likely to hold back through the end of this year. The stainless steel market such as the construction and automobile industries and white goods, is holding back on their projects until conditions change in 2009. It will be interesting to see how long the recession will continue in the global market in 2009 |
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