Will EU stainless steel alloy surcharges increase again?
Will EU stainless steel alloy surcharges increase again?

17 June 2022 – According to current calculations, the European stainless steel alloy surcharges for July 2022 should actually increase significantly. We put forward a bold thesis on alloy surcharges and have rolled the dice a little for you. Fitch Ratings raises price expectations for metals and mining products, sometimes significantly. And Taiwan with the highest stainless steel HRC import prices in 8 years.

Are EU stainless steel alloy surcharges rising again?

With regard to the European stainless steel alloy surcharges for July 2022, we would like to put forward a daring thesis today. Contrary to the assumptions of well-known analysts, we see a significant increase in alloy surcharges coming.

We have thrown the dice a little and used the adjusted calculation method for the alloy surcharges and the current parameters of the price development for raw materials as a basis. And ended up somewhere completely different…

Ferrochrome prices clearly increased

In particular, the high carbon ferrochrome benchmark price for Q3 2022 should actually be up to 50% higher than in Q2 2022. The sharp rise in energy prices, which account for the largest share of ferrochrome prices, had already pulled away shortly after the announcement of the Q2 benchmark prices and had made FeCr significantly more expensive.

Actually necessary increase of alloy surcharges in July 2022

Currently (as of 16 June 2022) and without changes in the June 2022 scrap factor, we see an (actually) necessary increase of around 200 EUR/MT ($210.55/MT) for the alloy surcharge for 304/304L (1.4301/1.4307) in July 2022. And for alloy surcharge 316/316L (1.4401/1.4404) an (actually) necessary increase of at least 300 EUR/MT ($315.82/MT).

Alloy surcharges would theoretically have to rise again to the level of May 2022

Without the use of stainless steel scrap in the calculation of the alloy surcharges for July 2022, the surcharges would have to increase even more significantly and would already be back at the level from May 2022.

Alloy surcharges pure dice game

Due to the fact that there is a certain arbitrariness on the part of the manufacturers in the scrap factor, we ask that our forecast on the alloy surcharge for July 2022 be taken with great caution. We have all seen that the manufacturers do what they want in this respect.

We ourselves are curious to see where the truth will be found in the end. What are your thoughts on this? Feel free to drop us a message at: info@steelnews.biz

Fitch Ratings raises short-term metal price assumptions

The rating agency Fitch has raised its price expectations for metal and mining products. Especially for energy sources like coke and coal, the price outlook goes up by up to 33%. But Fitch Ratings also upgrades the expected nickel price by 25%.

Taiwan: Stainless steel HRC import at record high in May 2022

According to statistical data, Taiwanese import prices climbed to their highest level in 8 years in May 2022. While imports declined only slightly in May, stainless steel hot-rolled coil prices increased by more than 50% compared to the same period last year.

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