The monthly Stainless MMI® registered a value of 89 in August, a decrease of 3.3 percent from 92 in July.
The Stainless MMI® took a three-point hit throughout July, largely due to dropping demand in China as evidenced by falling prices for both 316 and 304 grades, even though 304 saw only a small drop.
In addition, falling nickel prices on the LME also impacted the overall complex and led to US domestic surcharge declines for both 316 and 304.
“The Stainless MMI® continues to wobble,” said Lisa Reisman, executive editor of MetalMiner. “What we find most striking with this month’s stainless index relates to the divergent pricing across global markets. For example, stainless prices rose slightly in Korea while they dropped elsewhere in Asia, particularly in China.”
“China’s PMI results for July continue to suggest demand has weakened and we see that throughout the monthly MMI results,” Reisman continued.
We note that the Bureau of Economic Analysis (BEA) has revised down its estimates of consumer goods expenditures during the previous quarter, as reported by the Consumer Metrics Institute: “The contribution to the annualized growth rate from consumer expenditures for goods weakened substantially to 0.18%, (down from 1.11% in the prior quarter, and down even further, from 1.29%, since the fourth quarter of 2011).”
This decline in consumer goods demand has contributed to sagging stainless prices.
Price Drivers of Stainless Steel Index Decline
The Allegheny Ludlum 316 stainless surcharge dropped 5.2 percent. The Allegheny Ludlum 304 stainless surcharge declined 5 percent over the month.
The price of Chinese 316 stainless coil fell 3.4 percent over the past month, the second straight month of declines. The price of Chinese primary nickel saw a small decline this month, falling 5 percent. The value of Chinese 304 stainless steel scrap weakened by 0.4 percent this month. Chinese 304 stainless coil prices decreased by 0.4 percent as well.
The price of Chinese 316 stainless steel scrap closed the month down 2.1 percent.
After dropping the previous month, the 3-month price of nickel prices dipped 1.2 percent on the LME to $16,245 per metric ton.
Chinese ferro-chrome dropped very slightly since last month, as did Chinese ferro-moly prices.
Korean 304 stainless coil experienced a slight bump, increasing 0.6 percent. Korean 430 stainless steel coil also rose by the same margin.
The Stainless MMI® collects and weights 14 global stainless steel and raw material price points to provide a unique view into stainless steel price trends over a 30-day period. For more information on the Stainless MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.