Although companies purchasing stainless steel might find some great deals right now, the stainless steel market is “on the verge of collapse,” according to a recent Purchasing.com article, and stainless steel prices and demand will not increase anytime soon.
As demand slows to a crawl, stainless steel transaction prices feel the hit. “Market mavens say alloy and scrap surcharges are shrinking surcharges and base tags are sliding as well,” Purchasing.com announces, and MEPS predicts that transaction prices for 304 products should fall fast, largely due to basic raw material costs. MEPS recently forecast another drop for type 316 figures, and a growing stainless steel inventory in LME warehouses isn’t doing any favors for the metal.
At the same time, MEPS predicts that rises in nickel and scrap value might offset declining chromium costs. Plus, most producers are taking action to save their businesses against the stainless steel drop. AK Steel and Allegheny Ludlum already reduced production this month, and the companies are expected to continue reducing production until demand returns. ThyssenKrupp plans to drop stainless steel output 25 percent at the beginning of 2009, and North American Stainless is expected to conduct a similar plan, since stainless consumption is “way below” the usual levels.
The metal has already suffered a seven to 10 percent decline in demand from purchasing last year, but it’s hoped that these production cuts might finally stabilize prices, despite a current downturn in transaction values. For more precise information on current metal prices and trends, consider visiting the MetalMiner IndX(SM), updated daily with pricing information for global metals markets.