Stainless Steel Prices Expected to Rise Due to Increasing Raw Material Costs

Stainless Steel prices are increasing worldwide. The prices in India are expected to surge further on account of bullish trends following the higher nickel and molybdenum prices.

Tight nickel ore supply in Indonesia along with previous increase in ferronickel, nickel prices and raw material costs, are expected to sustain a strong trend in the stainless steel market in the short term.

Stainless steel accounts for the vast majority of nickel consumption. Indonesia is the top producer of Nickel and influences the market. Its output of the base metal has grown tremendously from 2017’s number of 345,000 tons to a whopping 1.8 million tons in 2023. Indonesia also hosts 55 million tons of nickel reserves.

Nickel Price Movements

Currently, the nickel prices are at a record high and trading above US$ 18,000/ton LME’s three-month futures contract. Rigorous hike in input costs is raising concerns for manufacturers. As a result, major stainless steel producers have increased prices for May orders. 

The London Metal Exchange (LME) nickel futures price soared overall by US$ 2,255/ton compared to 1 April 2024 where it reached $ 16,645/ton, while on 8 May it rose to US$ 18,900/ton CFR Hamburg, Europe.

Ferromolybdnum Price Hike

Indian ferro molybdenum prices surged by Rs 116,500-117,000/t (US$ 1,395-1,400/ton) in May due to supply shortage globally. The latest prices offered is at around Rs 2,650,000/ton (US$ 31,735/ton) ex-works, Nagpur, reflecting the recent uptrend.

The molybdenum is a key alloying in the production of stainless steel and nickel-based alloys. Molybdenum is used to improve the resistance to pitting corrosion of stainless steels.

Price Hike by Major Stainless Steel Producers

• South Korean Stainless Steel Mills

POSCO a major stainless steel producer has increased prices and the hike is about KRW 100,000/ton (US$ 73/ton) for the 300 series and KRW 50,000/ton (US$ 37/ton) for the 400 series.

POSCO’s price revisions is due to various factors, including the rising costs of vital raw materials like nickel, molybdenum and chrome, alongside the currency exchange volatility i.e. won Vs dollar.

• Revision by Taiwan’s Leading Stainless Steel Producers

Taiwan’s leading stainless steel mill – Yusco (Yieh United Steel Corp) has raised prices by US$ 100-150/ton for the 300 series for May.

Also, Walsin Lihwa, another Taiwanese-based stainless steel wire rod producer, raised prices for May. The 300 series saw a NT$ 5,000/ton (US$ 155/ton) increase, while surcharges for 316 and copper-contained products rose by NT$ 1,000-3,000/ton. Prices for the 200 series surged NT$ 2,000/ton, with the 400 series unchanged.

This revision in line with rising nickel, molybdenum, and copper prices, alongside a depreciating Taiwanese dollar, driving manufacturing costs up. Also, the country’s improving business climate index (BCI) indicates a gradual market recovery.

• Chinese Stainless Steel Market Improves

Trade prices in key distribution markets such as Wuxi and Foshan in China have also seen an uptick compared to April. After the Labor holiday, China’s stainless steel futures market witnessed an uptick. The optimistic market sentiment contributed to the strengthening of the spot market. Analyzing the higher raw material costs, analysts anticipate short-term strength in the market.

Macroeconomic benefits in China, coupled with the trade-in policy and favorable long-term consumption data, have bolstered futures prices. Consequently, market inquiries surged, leading to fluctuating transactions and overall bullishness. 

Indian Stainless Steel Mills are Likely to Revise Prices

Since the price of stainless steel is on a rapid rise mode in the international market, there are assumptions that Indian mills will increase offers.

Earlier, in April, India’s top stainless steel producer raised prices totaling around Rs 7,000-8,000/ton (US$ 84-96/ton) for SS 300 and 316 grades to pass on higher input costs as well as active demand.

If sources are to be believed, bookings have been held by a few mills for particular grades, hence, assumptions are high for the fresh price announcement soon.

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