The stainless steel market had a good start in the first two months of the year, with surcharges having been revised upwards on the back of higher chrome ore prices. In our last chrome ore report, released on the 17th of February, we noted that given the uncertainty in the chrome ore market, we were uncertain of whether these stainless prices will hold. However, in light of higher nickel prices, we expect that March will see another lift to stainless steel prices.
Here are some of the highlights in the stainless steel markets globally at the moment:
China
The Stainless Steel Council of China Special Steel Enterprises Association published its 2016 stainless steel crude output data earlier this month. The data showed that China’s output rose 15.65% y.o.y. Imports rose around 6.06%, in line with 2015. Exports however increased 13.58% while consumption rose 13.58% y.o.y.
More recently, in the second week of February, China’s stainless steel mills held back on offering material due to the strong rebound in nickel prices which rose to $10,675/tonne on Valentines day (14 February), representing a $360/tonne increase from January.
The surge in nickel prices were largely due to government shut downs of Philippine’s mines. Affected by rising prices, Chinese stainless mills opted to hold off on offers and are trying to pass a 30/tonne increase by March. However, it remains to be seen whether the demand will be there or if consumers will resist the price increase. We can however appreciate the challenge at having to hold prices constant in the face of rising raw material costs.
Taiwan
The mills are expected to reveal their new price later this week ( 23-24 February). Given the surge in nickel prices and the reaction from Chinese mills, we expect an upward revision of around $30-50/tonne.
Like in China, Taiwan stopped offering steel wire rod.
With respect to Taiwan’s trade statistics, the Taiwan Iron and Steel Association and customs statistics reveals that in January, Taiwan imported 117,801 tonnes of special steel (-12% m.o.m) which includes stainless steel which declined by 7% m.o.m to 73,595 tonnes. Imported stainless steel slab and scrap increased by 18.8% and 15.5%, respectively
In terms of exports Taiwan special steel exports totaled 140,350 tonnes (-11%m.o.m) which includes stainless steel which declined by 8% m.o.m to 115,722 tonnes.
Japan
Since August last year Nippon Steel & Sumikin Stainless Steel Corporation (NSSC) have raised stainless steel prices of 300 and 400 series by around ¥50,000. In February alone, NSSC adjusted the prices for 300 and 400 series upwards by ¥10,000/tonne and ¥15,000/tonne respectively.
In addition, the tight market enabled NSSC to increase the bsae price for 300 and 400 series material of 3mm thickness by around ¥10,000/tonne.
Korea
Korean stainless steel prices is bucking the trend of recent price hikes. Following the Korean Lunar New Year, prices held steady, but the exchange rate variations of the Korean won vs the US dollar caused import prices to fall.
Europe
Outokumpu released its 2016 stainless steel product volumes of 2.44m tonnes (+2.6% y.o.y). Of this, cold rolled was 1.73m tonnes, hot rolled strip was 425,000 tonnes, long products totalled 65,000 tonnes, stainles ssteel semi finished products was 247,000 tonnes and tubes were 1,000 tonnes.
Notwithstanding the improvement in Outokumpu’s volumes, the EU Commission is still launching investigations into Asian stainless steel imports. The latest probe is against stainless steel seamless tube imports from China and Indonesia.
Russia
Russia SpetStal Association revealed its statistics for December 2016. The country imported 32,076 tonnes of stainless steel products, representing an increase of 1.8% m.o.m.
Of this, stainless steel sheet imports fell by 4% compared with November. Stainless steel seamless pipe imports rose by 157.2% m.o.m and welded stainless steel rose by 13.1% m.o.m. Meanwhile imported stainless steel products declined by 7.8% m.o.m.
