In June, European surcharges on stainless steel alloys were reduced due to weak demand, leading distributors and service centers to lower their inventories and postpone purchases in anticipation of future price cuts. The decline in London Metal Exchange (LME) benchmark nickel prices further contributed to the decrease in stainless steel prices, and analysts predict further declines during the summer season.
Specifically, the additional cost for cold rolled 304 stainless steel coil at the factory dropped to €2,512.67 per ton, down 0.97% from the previous month. The markup on cold rolled 316 stainless steel alloy coil decreased by 3.76% to €4,060 per ton. Similarly, the surcharge for 430 stainless steel cold rolled coil at the factory decreased by 1.1% to €1,052 per ton.
While finished stainless steel prices had shown some consolidation earlier this year, the current sentiment has become less optimistic, and sales are reportedly below the usual seasonal levels. Market participants in major global markets, except the Middle East, are bearish on the outlook for finished stainless steel, while the Middle East shows rising demand. Concerns about rising prices of raw materials are expected to impact European manufacturing in the third quarter. However, falling energy prices in recent weeks may lead to higher capacity utilization in the coming months.
Analysts widely predict that prices for commodities such as nickel and molybdenum will continue to decline until the end of the third quarter. This trend is causing buyers to hold back, which is helping to lower alloy surcharges this month. The LME's three-month nickel contract has fallen by 8.7% in the past month, reaching $21,592.50 per ton, according to official data. The valuation of 99.8% molybdenum ingot in the Rotterdam warehouse has remained unchanged at $72.50 per kilogram as of May 23.
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