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The market is currently in turmoil again. The Chinese government has announced new measures to curb rising commodity prices. Base metals have fallen. And the U.S. Federal Reserve is thinking out loud about monetary policy measures. That triggers reflexes. But do these have a real impact on stainless steel prices and availability? An analysis by Thorsten Gerber.

Stainless Espresso: The attempt to take pressure off the steel kettle
Stainless Espresso: The attempt to take pressure off the steel kettle

China: wants to take the pressure off the kettle

After the Chinese government announced measures to curb skyrocketing commodity prices on May 19 and 20, 2021, commodity exchanges saw the expected results.

Non-ferrous metals fell across the board. However, still stand high in absolute terms and above those of four weeks ago.

US: Federal Reserve announces talks

In the United States, the Federal Reserve has resorted to a familiar means of actively influencing prices on stock exchanges and currencies. It has announced that it wants to talk about the possibility of resorting to monetary policy means to avert possible inflation.

In the past, that has often been enough to relieve pressure and calm the markets.

Nickel: What is the status?

Nickel took a small hit on the London Metal Exchange and Shanghai Future Exchange yesterday, falling slightly in line with the general trend in non-ferrous metals.

Did this have a significant impact? No, it did not. In absolute terms, nickel on the LME and SHFE is still above the quotations of four weeks ago.

Stainless steel prices: What has been the impact?

Overall, the current market developments should have little impact on stainless steel prices. Nickel and stainless steel already decoupled in price discovery months ago. In other respects, too, raw material costs currently have only a limited impact on prices. Availability is the determining issue. And the fact that steel products are in short supply has not changed.

Further stainless steel shortages due to Chinese measures?

The announced Chinese production restrictions are more likely to further reduce the global supply of steel and stainless steel. In addition, there is growing evidence that export taxation of Chinese steel is becoming increasingly likely – we will keep you updated on this.

Steel prices in the US and EU continue to rise

In our view, the price trend is also shown by yesterday’s developments in Europe and the United States. In the US, HRC steel prices continued to rise, unimpressed, to more than $79/cwt. ArcelorMittal also raised its prices per ton of steel again. And market sources have told us that stainless steel plate prices for 304 2B 2mm have been raised by €200 a ton in Europe.

Where is the trend currently heading?

Currently we can perceive the attempt of various parties to cool down the massive price increase in commodities. But at the moment we do not believe that this will actually be successful. And apparently we are not alone in this, as a recent Nasdaq.com article shows.

China will not endanger its recovery after the pandemic

“Analysts, however, say unless China takes steps to curb the consumption of industrial commodities, which could hamper its solid recovery from a pandemic-driven slump, the price impact of recent measures and pronouncements will only be temporary.”

nasdaq.com

Who is Thorsten Gerber?

Thorsten Gerber is an international expert in stainless steel and CEO of the Gerber Group. Born in Germany, he has been active in the world of steel and stainless steel for almost thirty years.

With companies on four continents, he runs a successful international stainless steel trading business. With an annual multi-million euro turnover and thousands of tons of stainless steel traded, he stands by his customers as an experienced stainless steel expert.

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