Mill wants higher stainless bar prices
Buyers are expected to reject 7% price hike
Tom Stundza -- Purchasing, 11/25/2009 11:15:58 AM
North American Stainless plans to increase prices on 300-series stainless steel round bar products by 7%, effective with January shipments. The Ghent, Ky., company notified customers of the price hike this week in a letter that said it was necessary to support continued growth and investment in its business. Analysts say buyers are expected to reject that reasoning.
However, demand isn't very strong-moving from a record decline in 2008 to weak recovery in 2009, according to economist John Anton at IHS Global Insight. Atop that, sales prices this month for Type 304 stainless bar of $2,759/ton, as posted on Purchasingdata.com, are at least 10% below current list of $3,080.
Market sources say the only stainless bar products that are in strong demand right now are heat-treated types such as 410 and 17Cr4Ni used in oilfield applications.
Steel market analysts say that recent nickel price decreases are lowering stainless raw material surcharges and the overall amount o f money mills are getting for their products. "With the way nickel is trending this month, the surcharges for January may be lower still," notes a report on AMM.com. In fact, nickel has dropped to an average $7.76/lb on the London Metal Exchange this month, the lowest spot price in five months.
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