Stainless steel prices are falling

In all geographic regions, stainless steel products are falling in price, mainly due to lower raw material costs. Thus, buyers minimize their purchases as they expect values ​​to decline.

Transaction figures rose during the first months of 2017, stimulating speculative buying at specialist centers and from end users. As a result, most of the participants in the supply chain formed their stocks.

The price increase was supported by a “perceived” recovery in real demand, as end-user consumption has improved over several years.

Nickel supplies were cut in 2014 when the Indonesian government banned the export of unprocessed lateritic nickel ore, a raw material for nickel pig iron. The rationale for this move was to encourage investment in refining capacity in Indonesia, and to some extent this has happened. As some of these new factories are already on stream, the export ban has been loosened.

Indonesia's place as the main supplier of nickel, especially to China, was taken by the Philippines. Environmental secretary, Regina Lopez, has proposed shutting down more than half of the country's nickel mining potential, citing pollution concerns. However, Lopez was recently removed from office and this policy is likely to be canceled.

Ferrochrome contract prices rose steadily in the second half of 2016 and more sharply at the beginning of this year. However, a downward adjustment to the selling price was agreed in the second quarter of 2017. Further cuts are forecast in the third quarter.

These trends in manufacturing costs for stainless steel makers have fueled enthusiastic purchases during the early months of this year and a more subdued atmosphere today.