Weak demand and lower nickel prices put pressure on stainless steel quotations

The decline in nickel prices at the London Metal Exchange (LME) to the lowest levels seen in the past couple of years has directly affected stainless steel quotations. As of June 27, nickel prices at the LME have declined to the level of $13,620/mt for cash settlements. In addition to globally poor demand, the reduced raw material costs have resulted in further declines in stainless steel prices. Chinese stainless steel producers have announced prices cuts in both their local and export prices in recent weeks, while European stainless steel mills have decreased their alloy surcharges. Meanwhile, amid weak market conditions, in the first quarter of the current year stainless steel production in Europe decreased by three percent year on year, while China's stainless steel exports in May were down 11 percent compared to the April volume.
 
Apart from weak demand in the Turkish stainless steel market, import prices of stainless steel products have also remained at low levels. Chinese and Taiwanese origin offers to Turkey for 304/2B stainless steel cold rolled coil (CRC) of 2.0 mm thickness have declined to $2,450/mt CFR, while the price range for stock materials and second grade products is quite wide. The appreciation of the US dollar against the Turkish lira has made it difficult for traders and stockists to conclude sales in the domestic market, while no recovery in activity is expected in the Turkish domestic market due to the general slowdown in demand during the summer and with the approach of Ramadan.