US stainless steel mills continue to maintain their selling prices at among the highest in the world despite pressure from slowing demand and rising import competition.
US domestic stainless steel prices, like those in many other countries, surged for a prolonged period after the market rebounded from the first wave of Covid infections in , with further upward pressure exerted by the effects of Russia&#;s invasion of Ukraine in early .
By mid-, however, worldwide stainless steel prices had started to fall, as demand softened, stock levels grew and nickel costs declined. The size of the subsequent price reductions varied across regions. US mills initially benefitted from more favourable supply-demand dynamics relative to their counterparts in Europe and Asia.
In May , the MEPS US 304 cold rolled coil transaction price was US$337 per tonne above the equivalent figure for Europe. The gap has now more than quadrupled to US$ per tonne. In May , the price in the United States was US$ per tonne, compared with US$ per tonne in Europe.
The MEPS Asia average is higher than the Europe average, resulting in a smaller, but still considerable, difference from the United States of US$ per tonne.
The recent volatility in molybdenum prices has exacerbated the situation for molybdenum-bearing grades. In May , the US transaction value for 316 cold rolled coil was more than 40 percent higher than the MEPS Europe average. This is despite the gap reducing from US$ per tonne in April to US$ per tonne in May.
One of the reasons for the significant price disparity between the United States and the other regions is the continued use of the &#;base plus alloy surcharge&#; mechanism, amid strong price discipline by US mills. Base prices in the United States are at historically high levels, with only a few modest reductions recorded during the past year.
US transaction values have mainly moved in line with published alloy surcharges. This resulted in a fall of US$ per tonne for 304 cold rolled coil between May and May .
In Europe, however, a larger drop of US$ per tonne was recorded. The &#;all inclusive&#; prices agreed between local mills and distributors fell by more than the reductions in published alloy surcharges, driven not only by declining raw material costs but also by weak demand and high inventories.
A disadvantage for US producers is that inflated domestic prices are attracting international suppliers seeking to maximise their profit margins. Imports are a cheaper option for US buyers despite the addition of Section 232 duties. Many distributors, however, are dissuaded from purchasing foreign-origin material due to the extended delivery lead times.
MEPS has received reports of local mills offering reduced, one-off prices for irregular business that may have otherwise been placed overseas. However, no official announcements of higher discounts levels, thus lower base prices, have been made.
Decreases in alloy surcharges will push US stainless steel transaction prices lower in June. Economic uncertainties continue to weigh on market sentiment, and demand has started to slow ahead of the summer. The S&P Global Manufacturing PMI for the United States fell to 48.4 in May, indicating the biggest contraction in the manufacturing sector in three months.
Further decreases in domestic mill selling values are anticipated, causing buyers to remain cautious in their purchasing from both local and foreign suppliers. Nevertheless, the price gap between the United States and Europe/Asia is unlikely to normalise in the coming months.
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Steel is one of the most common materials in the world and there are many sub-categories of steel depending on the various qualities and characteristics of a particular build. The properties that vary the most between steel types are strength, ductility, hardness, aesthetics and cost. It stands to reason that selecting the proper steel type for the job will benefit both the quality of the project and the cost.
Stainless steel is widely used in the food and medical industries because it is easily cleaned and sanitised. Stainless steel can also be used at high temperatures and is less reactive with foods.
Strength and corrosion resistance often make stainless steel the material of choice in transportation and processing equipment, engine parts, and firearms. And sometimes, designers specify &#;Stainless&#; simply for its aesthetically pleasing appearance rather than for its structural properties.
Stainless steel is defined as low-carbon steel. It does not readily stain with water, corrode or rust like ordinary steel.
Stainless steel is more expensive to produce because of the addition of the variety of alloying elements, such as iron, chromium, nickel, manganese and copper. Manufacturers also add about 10% chromium to the steel as an added agent to provide corrosion resistance.
The chromium attaches itself to oxygen more readily than iron and thus creates a chromium oxide layer which protects the metal from degradation. This passive layer is essentially &#;self-healing&#; too, so if the coating is scratched or damaged, stainless steel has a fair ability to regenerate and &#;heal&#; the passive layer spontaneously. Stainless steel is also non-porous which further increases its resistance to corrosion.
The cost to produce would also depend on the grade and surface finishes of the stainless steel made to suit the environment to which the material will be subjected to.
Depending on the grade of stainless steel, the cost difference may not be too noticeable in smaller products made from Stainless steel such as nuts and bolts and short lengths of pipe, but the price difference would become more substantial when a larger amount of stainless steel is required for a product.
Choosing stainless steel for a particular job will involve careful consideration. If the metal is going to be hidden from sight, there is no sense in spending the extra money strictly for appearance sake. However, if it is going to be hidden from sight but will be subjected to a corrosive environment, then stainless steel would be the most durable and cost effective option overall.
Unlike with galvanised steel products, it is clear that stainless steel offers better performance because the entire piece is rust resistant, rather than just a galvanised coating.
The durability and ease of maintenance of stainless steel provides long-term performance with a minimum of downtime and cost associated with maintenance, which will more than compensate for the sometimes higher initial purchasing costs.
When it comes down to the crunch, stainless steel is, in fact, most often the least expensive choice in the grand scheme of things when compared to other metals.
Steelmor is the leading supplier and manufacturer of stainless steel in South Africa. Give us a call to find out how we can help meet your product requirements.
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