Stainless Steel Market Exhibits Mixed Trends as Nickel Falls, Copper Rises

Stainless Steel Prices

• Nickel opened today down by 0.36% $16,420/ton, while Copper opened today up by 0.73% at $9,020/ton.
• INR opened today against USD at 83.95/-.
• Current retail price for 304 CR wider 2B is now running approximately at Rs.198-201/kg basic price range, ex-Delhi, while for narrow, it is approximately Rs.3-5/kg cheaper. Plus GST.
• SS 316L imported material is now being retailed in the price range of Rs.317-321/kg for HR wider. Indian material is expensive by Rs.5-10/kg. For CR wider, the rates are Rs.10/kg higher than HR.SS 201 imported CR 2B (extra low thicknesses like 0.26mm) is being retailed at Rs. 143-148/kg, ex-Delhi, plus GST. Domestic 201 (cheapest grade) is now being retailed in the price range of Rs.140-143/- base price (plus thickness difference extra), plus GST.

Stainless Steel Demand and Supply

• Demand is slightly better in 304 & 316L (CR & HR), in generic sizes, as compared to the previous 2 months.
• Not much demand is there in ferritic grades, except some railway fabrication usage in 409M/X2CrNi12/IRSM 44-97 grades.
• Good demand is being observed in No.4/Matte PVCfinish in 201 grades, due to short supply from domestic players, and non-renewal of BIS for imported material.
• Decent demand is also being observed in 304 narrow sizes, for applications like pipes and tubes or rerolling usages, due to short supply in imported material.

Stainless Steel News

• China's stainless steel futures market experienced a modest uptick last week, with the main contract climbing back above CNY13,800 per ton. In contrast, the spot market saw minimal changes during the same period. According to market participants, the slight rebound in stainless steel futures was largely driven by expectations of a potential U.S. interest rate cut in September, fueled by positive macroeconomic signals. However, this optimism had limited influence on the spot market. Despite the high raw material prices, the stainless steel market continued to face an oversupply. Although steel mills made some adjustments to their production levels, there were no significant plans for production cuts. On the contrary, social inventories recently saw a slight reduction, and there was some anticipation for a seasonal demand increase. As a result, market analysts predicted a period of volatility in the short term.
• Global steel giant ArcelorMittal has announced the launch of a new low-carbon transport service aimed at reducing CO2 emissions by approximately 90% for steel deliveries to its European customers. This initiative is part of the company's ongoing efforts to lower its carbon footprint and contribute to sustainable logistics. In 2023, ArcelorMittal's European operations shipped 27.5 million tons of steel, with road transport accounting for about 38% of the total. On average, road transport emits 65 grams of CO2 per ton of steel per kilometer. By using trucks powered by hydrogenated vegetable oil (HVO) biodiesel, ArcelorMittal can reduce carbon emissions by 80-90%. The low-carbon transport service was launched at the end of 2022, with a pilot phase in 2023 that successfully tested the transport of 190,000 tons of steel over 580,000 kilometers, resulting in a CO2 reduction of 794 tons.
• India's state-owned Steel Authority of India Limited (SAIL) has started using biochar in its steelmaking process at its plant in Odisha, aiming to reduce carbon emissions. On August 24, SAIL conducted biochar trials in the No. 1 Blast Furnace (BF) at its Rourkela Steel Plant. Biochar, produced through the pyrolysis of plant and animal biomass, can partially replace pulverized coal injection (PCI) in blast furnaces. India's steel industry heavily relies on traditional blast furnace technology, which uses coal as a reducing agent to produce iron, releasing significant amounts of carbon in the process. According to data, coal-based blast furnaces account for 73% of India's total operational ironmaking capacity. As nations worldwide commit to achieving net-zero emissions, there is a growing effort to find alternatives to fossil fuels in steel production. SAIL’s initiative is part of this global trend, exploring sustainable options to reduce the carbon footprint of steelmaking.
• Container shipping rates from Shanghai to the US West Coast have plummeted by 30%. Medium-sized shipping companies, typically for intra-Asia routes, focused on high freight rates and temporarily entered the Asia-to-US West Coast market. Large shipping companies are also pushing for vessel size increases and launching new services. These factors have led to a surge in capacity on routes to the US West Coast, and with a potential slowdown in demand, freight rates have easily declined. Meanwhile, the US East Coast may face port strikes this fall. In anticipation of such events, freight rates on the East Coast have only dropped by 14% from recent highs, a smaller decline compared to the West Coast. Should strikes occur, port congestion and the redirection of shipments to the West Coast could temporarily strain capacity. However, some experts believe that global capacity supply and demand will continue to ease in the short term. The supply of new vessels is expected to remain high through 2025.
• The major Taiwanese stainless steel manufacturers have signalled stable or even rising stainless steel prices for September 2024, citing raw material costs, energy prices and exchange rates. At the same time, the Chinese spot market for flat rolled stainless steel has also shown stable prices for grade 304 since mid-August. According to market reports, demand in China has increased in the past week and is already indicating the start of the peak season in some areas. Stocks of the 200, 300 and 400 series fell by up to 1.23%, depending on the category and region.
• The Environmental Impact Assessment (EIA) of the stainless steel pipe production capacity expansion project in Dilovası, Kocaeli, submitted by YC Inox TR Çelik Sanayi ve Ticaret A.Ş., a subsidiary of Taiwan's pipe producer YC Inox, has begun, according to Turkey’s Ministry of Environment, Urbanization and Climate Change. With the total investment of this project amounting to TRY 64.86 million, the production capacity of the plant is planned to be raised to 75,000 tons per year from the current 20,000 tons per year.
• Inflationary pressure in the US and the eurozone continued to ease in July 2024. This further increases the likelihood of interest rate cuts by the US Federal Reserve and the European Central Bank in September. The latest data once again points to the Fed‘s imminent entry into the rate-cutting cycle on 18 September and a recession in the US is still unlikely. According to analysts at Deutsche Bank, US consumers increased their spending by 0.5 per cent in July compared to the previous month and showed no signs of diminishing consumer confidence or a greater propensity to save. A rate cut of 0.25 points is expected for the US market. After the inflation data for Germany had already indicated a weakening of price pressure on Thursday, the picture for the eurozone as a whole was confirmed on Friday. According to an initial estimate by the European statistics office Eurostat, consumer prices rose by just 2.2 per cent year-on-year in August after 2.6 per cent in the previous month. The core rate also fell slightly from 2.9 to 2.8 per cent. The ECB could therefore cut interest rates by 0.25 percentage points again on 12 September.

Expert Opinion

• Both 304 & 316L are expected to have a medium to good run in this week, owing to the slight raw material price increase.
• The 400 series is continuing with its dull run, due to the lack of demand in ferritic grades.
• The 200 series is still performing strongly, in special finishes like N4P (Matte PVC) & N8P (Mirror PVC) owing to the lack of imported products in the market.