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Global stainless steel mills are scrambling to adjust their prices in response to rapidly rising nickel costs.

Asian stainless steel mills withdraw offers as nickel soars
Asian stainless steel mills withdraw offers as nickel soars

Chinese mills have temporarily withdrawn offers

Market participants report that several Chinese stainless steel mills temporarily withdrew their bids while they evaluated their rapidly rising raw material costs.

Producers in other Asian countries also delayed submitting offers to local traders as they waited for price information from China.

Taiwan’s stainless steel mills expected to raise January prices due to high nickel prices

The LME nickel price has currently reached US$17,000/ton. The average monthly nickel price has reached US$16,841/ton so far this month, up US$1,033/ton from the previous month.

Due to higher raw material costs, upstream stainless steel mills were expected to raise their steel prices by more than NT$2,000/ton for January 2021, but the actual price adjustment will still depend on the nickel price trend in the next 1-2 days, according to market participants.

Asian exports to Europe also suspended

Asian export offers to European purchasers have also been suspended in recent weeks. In recent months, imports from Asia have been unattractive to European purchasers. This is mainly due to EC safeguard quotas and anti-dumping investigations.

However, with rapidly rising European stainless steel prices and lengthening local delivery times, particularly for 300 and 400 series flat products, material from overseas may again become attractive to some customers.

Purchasers struggle with rising sea freight costs

Aside from rising prices, purchasers around the globe are facing rising ocean freight costs due to lack of container availability. Port congestion is currently disrupting stainless steel shipments from Asia, particularly to Europe. British market participants report that several ships destined for the UK have been diverted to European mainland ports.

Transport situation between the UK and the EU tense

The transportation situation between the U.K. and mainland Europe is becoming increasingly tense as new coronavirus-related movement restrictions contribute to ongoing uncertainty about trading conditions between the EU and U.K. after Dec. 31. Transportation costs are expected to remain elevated into the first quarter of 2021.

Stainless steel raw material prices firm in the short term

Nickel and other commodity prices for stainless steel production, which have seen an upswing in recent weeks, are expected to remain firm in the near term. Investors have become much more optimistic with the announcement of the launch of the coronavirus vaccine in several countries.

Stainless steel prices to rise in coming months

In addition, production outages at nickel mines and rising domestic demand in China have heightened concerns about potential supply shortages in the market. As a result, it is inevitable that stainless steel prices will continue to rise in the coming months.

Source: hellenicshippingnews.com


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