Stainless steel sheet prices will increase this month

By Tom Stundza -- Purchasing, 5/7/2008 10:12:00 AM

Despite sluggish buying, cold-rolled sheet, Type 304, could rise 10% this month to $4726 per ton, 18% higher than it was in December.

That’s the forecast by purchasingdata.com. Here is the background:

The current stainless steel market is being described as “confused” with tight domestic supply and flat imports supporting stronger-than-expected transaction prices—even though purchasing by end users and service centers is down 14% from year-ago tonnage. One analyst says “economically sensitive end markets remain challenging” for stainless and specialty steel mills.

What hasn’t changed since March is that buying continues on an as-needed basis.  Demand is solid in the aerospace, energy and medical market sectors but down dramatically in the larger industrial, automotive and consumer-goods sectors. Yet, market economists anticipate further increases in stainless steel prices, perhaps even back toward the record levels of last summer, even if market supply outweighs demand. That’s because the recent moderation in alloy surcharges that have restrained the price inflation in North American stainless steel products is about to come to an end.

Ferrochrome is rising again and now is 25% higher than at the end of December, while nickel is 10% more expensive. Atop that, stainless steel scrap supply is tight (because of reduced industrial activity and expanded exports) and prices have increased by at least 5% recently.