The Stainless Steel MMI jumped four points this month to 59, driven by an increase in most of the underlying metals that make up the index. That included big jumps for stainless steel coil prices in China and LME nickel prices.
Stainless steel prices in China have recovered from previous lows last seen in May of this year. The increase in stainless steel prices coincides with increases in other forms of steel, such as hot-rolled coil (HRC) or plate.
Stainless steel surcharges decreased again during July due in large part to chrome, which is negotiated quarterly, declining from $1.54/pound to $1.10/pound.
Chinese data released this month has driven positive sentiment in the steel industry.
The China steel Purchasing Managers Index (PMI) rose to a 15-month high in July, reaching a value of 54.9. The PMI increase was caused by stronger demand — mainly at the beginning of July — and reduced inventories.
Nickel prices also increased in July. Nickel prices rallied during the second part of July, together with other base metals, such as copper. Nickel prices have been driven by stronger demand from U.S. stainless steel buyers.
The current short-term uptrend appears weaker than the previous downtrend. Some additional movements may be expected to the upside, even though the commodities outlook remains bearish.
What This Means for Industrial Buyers
Steel and stainless steel prices are being driven this month by increasing Chinese prices. The Section 232 investigation, together with curtailing capacity in China, have also supported steel prices.
All forms of steel (including stainless steel) have recovered this month. However, MetalMiner remains cautious about this short-term uptrend until the overall commodity outlook becomes clearer.
U.S. stainless base prices have remained stable as the anti-dumping and countervailing duties levied against China have nullified the impact of Chinese prices into the U.S. South Korea and Vietnam have replaced China in Asian imports. For the short term, U.S. stainless buyers still have access to imports to complement the supply of U.S.-made stainless steel.
Actual Stainless Steel Prices and Trends