20 April 2023 – Stainless steel alloy surcharges for May 2023 from European producers are expected in the coming days. Therefore, it is time to take at least a brief look at possible developments. Aluminum benefits from jump in demand and outlook hints at massive deficit in coming years. Analysts, banks and IMF agree: China is coming out of the crisis.
Outlook: EU stainless steel alloy surcharges and base price May 2023
Stainless steel alloy surcharges for May 2023 from European producers are expected in the coming days. Therefore, it is time to take at least a brief look at the likely developments.
Nickel prices have been more volatile, but have recovered more than $2,000 per ton compared to March.
Carbon steel scrap prices have softened slightly, but overall have had only a marginal impact on alloy surcharges.
Molybdenum had softened in April, leaving its record high, but indicated a recovery of more than 5% the last few days. However, the new ferrochrome benchmark prices should already be taken into account for May. These had risen about 15% from Q1 to Q2 2023.
Overall, alloy surcharges at grade 304 have a potential to fall between 1% and 3% with respect to the raw material mix. What makes a slight softening from the previous month possible.
Base price down for stainless steel in the EU?
Since, according to our own calculations and also according to market information, European producers have been quietly including a base price again for several weeks, changes in the alloy surcharge are likely to have little or no impact on current prices. Rather, there are indications that price increases are likely from May onwards. For grade 430 in particular, there is a potential of at least 4 to 5% in price increases in the raw material basket.
Aluminum benefits from sharp increase in demand
Aluminum prices had recovered significantly recently. Once due to a surge in demand in China for aluminum ingots. At the same time, China is struggling with energy problems in the hydropower generation sector. Overall, the Bank of America, for example, expects that the aluminum supply deficit could reach 1.5 million tons as early as 2023. By 2025, the deficit is even expected to widen to more than 4.5 million tons.
IMF, banks and financial advisors agree: China is coming out of the crisis
According to several reports in recent days from the International Monetary Fund, JPMorgan, UBS and Citigroup, China is emerging more and more from the crisis and is showing clear signs of growth. The IMF even seems to go so far as to say that China will once again become the global economic engine in the coming years. JPMorgan, UBS and Citigroup have revised their outlooks for expected Chinese economic growth significantly upwards. In the short term, this should also have an impact on demand for steel, stainless steel and aluminum, where prices will continue to be supported and move upwards.
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- Nickel up almost 10% since the beginning of April
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.