Stainless steel sheet prices 9% under list
Even lower prices forecast for November
Tom Stundza -- Purchasing, 11/4/2009 2:20:38 PM
Stainless steel sheet sold for 9% below mill list in
October, as compared with a 7% discount in September, as the weak-demand U.S.
market rejected attempts of producers to pass along all of their higher costs
of nickel and other alloys.
Stainless steel cold-rolled sheet, grade 304, sold for an average $2,589 in October, as compared with producer postings at an average $2,841. In September, the transaction price average of $2,334 compared with mill postings of an average $2,504.
A market review by MEPS (International) says that "transaction prices increased due to significantly higher alloy surcharges (despite) weak consumption in the U.S." but added that "prices were constrained by competition between sellers for any large purchase."
The analysts add that service centers "are operating on a hand-to-mouth basis as they can secure their needs from the inflated inventories at the mill depots and master distributors." As for end-use purchasing groups, buying activity was "particularly slow in the second half of October as customers looked forward to lower surcharges" in November.
The reduced surcharge is expected to bring the mill list price down to $2,732 this month. The Purchasing.com forecast for spot sales is $2,447, a 10% discount because of projected further slippage in purchasing in a seasonally poor buying month.
The MEPS analysis sees October's prices as the peak for 2009. "A fall in raw material costs during September will, almost certainly, push stainless prices lower in November," the report says. "Local mills are expected to try to maintain basis values during the remainder of the fourth quarter. However, traditionally weaker sales in the run up to the financial year's end may force producers to extend the discounts offered." So, selling figures are forecast to decrease in November and December.
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