Stainless steel prices will continue up
By Tom Stundza -- Purchasing, 12/6/2006 9:01:00 AM
Stainless steel sheet prices, already setting records, could move even higher in late December and January, due mainly to an unprecedented hike in the price of nickel on the London Metal Exchange in October and November. That’s the word from analysts at MEPS (International) Ltd., who also believe the peak of this current transaction price cycle will occur at the turn of the year. (Note: Buyers polled by Purchasingdata.com reckon that stainless sheet prices already have plateaued.)
“In the longer term, we expect stainless selling values to decline, albeit at a much slower rate than the escalation this year,” suggests the MEPS analysis. The steel consultancy anticipates the LME monthly average nickel cash price—which peaked at $14.83 in October and was $14.57 in November—will decline to $10.89/lb by September 2007, a month later than previously predicted. Nickel prices appear to show no signs of any steep fall off as they have averaged almost $11/lb through November. This could signal a soft landing in nickel prices next year, MEPS suggests.
However, the analysis also shows that nickel stocks are still extremely low, “so any small capacity problems can lead to another hike in the price on the LME, causing prices to climb even higher.”
Also, global nickel consumption is starting to show signs of slowing down and a period of lesser demand will ease the tight supply that has been seen in previous months. “This will put pressure on the mills and, as a result, we should start to see an easing of stainless prices after the New Year,” says MEPS.
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