Stainless steel market outlook

Nickel prices, which have reached $28,000/ton for cash payments all over the world and $25.500/ton for 3 months buyer, up 3.7 percent; stock quantities, which have fallen to 8.418 ton, down 5.5 percent since August 23, 2005; the plans of European steel mills to cut their holiday programs in an effort to meet demand and the tightness in the European market; and the prices in the Chinese market, which are not showing any signs of slowing down despite the low demand, all indicate that stainless steel market will remain strong at least till September and prices will not show any signs of slowdown till the end of this year. A kind of instability is observed in the Chinese local market. Although demand is fairly low, prices in the Chinese local market are high. Following the price hikes put into effect by most of the European mills last week, Chinese mills have started to announce price hikes. Price of 304/2B grade 2 mm stainless steel plate in Shanghai is at $3,300/ton for Baoxin production material, in Wuxi at $3,288-3,300/ton for TISCO production material, in Foshan at $3.525/ton for Zhangpu production material. Similarly, 304/No 1 grade 4-5 mm plates in Shanghai is at $3,175/ton for Baosteel production material, in Wuxi at $3,125-3,200/ton for Baosteel production material, in Foshan at $3.100/ton for Baosteel production material. These prices show that Chinese local market is still strong. Overseas countries show more interest in Chinese origin stainless pipes and bars day by day. The reason for this can be Chinese mills' catching European mills in terms of quality. Turkish local market is calm. Generally, Turkish market is known to be calm during summer months. However, the calmness this year is felt more clearly due to the tightness in the European market, lower inventories, and rising prices. The market is expected to gain activity with the end of summer. If Turkey can sustain its rising trend in economy, which it has caught for the last three years, it will be seen as a market with further growth potential. Many firms are talked to be investing in Turkey regarding stainless steel industry. Nowadays, Italian origin 304 series 2 mm stainless steel stock sheets are being offered to Turkey at $2,600-2,900/ton CFR level. Moreover, it is known that price of 304 series welded pipes in 33×2 mm over sizes is at $4,0-4,2/kg ex-works and no booking at these levels have been concluded to Turkey during summer period. Similarly, Chinese origin 304 series stainless steel welded pipes in 33×2 mm over sizes are at $3,4-3,5/kg CIF levels. Although the quality of Chinese origin pipes has reached European origin materials, the fact that deliveries of the orders take three months seems to be the sole disadvantage of Chinese origin materials. Similarly, Italian origin 304 series stainless steel bars are at €3,4-3,5/kg. If nickel prices continue following its current trend, these prices may increase in the coming period. As well-known, many firms adjusted and hiked their prices last week. Consequently, the overall market expectation is that the rise in the prices will continue till the end of September and the prices will gain stability by then and if there will be a decline, this will be a slight one.