Last week was a busy one for flat-rolled stainless steel.
First, North American Stainless (NAS) announced a base price increase which was quickly followed by Outokumpu Stainless USA, ATI Flat Rolled Products and AK Steel. Then, later last week the four U.S. mills filed anti-dumping and countervailing duty petitions against China for stainless sheet and strip, charging that unfairly traded imports are causing material injury to the domestic industry. The U.S. flat-rolled stainless base prices were unsustainably low, as we have been reporting for several months now.
The threat of anti-dumping lawsuits has come to fruition, and U.S. stainless mills have joined the bandwagon of targeting China, specifically. For service centers and manufacturers buying directly from the mills, the time has come to ensure that a short-term supply plan for flat-rolled stainless steel is firmly in place.
NAS, Outokumpu and AK Steel increased the base price on flat-rolled stainless steel effective with shipments March 1st. ATI Flat Rolled Products’ increase takes effect with shipments on February 28th. Cold-rolled grades of 200, 300 and 400 series stainless steel will be increased by reducing discounts by two points.
For 304 2B base gauge, this equates to an increase of around $0.0350 per pound. AK increased automotive alloys by $20 per ton. Continuous mill plate (CMP) and discrete plate will increase by $0.030 per pound. The base price increase was expected, but what was uncertain was whether the increase would occur in March or April.
With ATI and AK Steel out of the commodity stainless market, the anti-dumping and countervailing duty petitions filed last week against China could create a short-term supply disruption for service centers and manufacturers.
With the threat of anti-dumping lawsuits looming, the volume of imported stainless sheet and strip had already been diminishing, which should be seen in the upcoming months. The lack of imports — combined with AK and ATI being out of commodity stainless steel — has already pushed out domestic lead times and could create a supply shortage once service center restocking commences in full force.
Since China was the only named party, it is possible that the U.S. will see increased imports from other Asian countries such as South Korea, Taiwan or Vietnam, or even some European producers such as Aperam or Outokumpu, both significant importers into the U.S. already.
Perhaps ATI and AK Steel will have to reenter the commodity stainless market sooner than they thought, which could mean more base price increases, and could result in manufacturers looking at sourcing from countries not subject to anti-dumping actions.
Both NAS and Outokumpu’s Calvert, Ala., plant have a cost structure which make them globally competitive; however, service centers and manufacturers will be forced to look elsewhere if prices rise above that globally competitive price, as occurred in mid-2014.
The anti-dumping and countervailing duty petition against only China will be an interesting case. In 2015, all stainless mills throughout the world suffered monthly nickel price declines. Was it really Chinese imports thjat caused damage to the U.S. stainless steel industry, or was it the precipitous price decline of nickel? The U.S. Department of Commerce hearing will be held in mid-March and the International Trade Commission hearing will be in late March or early April.