Stainless Set to Fall Further

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As demand for stainless continues to soften, Korea has suspended exports of cold rolled coil in the face of Chinese competition where prices are even lower than for hot rolled coil. On the back of a falling oil price, rising LME inventories and softening stainless demand, nickel prices have finally broken through the US$ 18,000/metric ton barrier on the LME and are headed for the low $17,000’s over the next few weeks. LME stocks have tripled over the last year. Protected by a weak dollar, US domestic stainless production capacity utilization has held up well at around 88% helping US mills to maintain firmer prices than they would otherwise be able to do in the face of large scale imports. However US mills are not immune from the world market and prices will fall here too as the year unfolds. Buyers should keep stocks low as prices are likely to continue to slide.

–Stuart Burns

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