NSSC leaves prices unchanged for December

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The fall in nickel prices in November has been largely offset by the strengthening of the Japanese currency, allowing NSSC to roll over its alloy surcharge, it said. The company’s ferro-chrome costs were also unaltered for a fifth straight month.

The stainless steel producer does not disclose the exact prices for its products.

Shipments of stainless products continued to rise in November, adding to a strong sense of recovery, NSSC said.

Demand from the construction and housing sectors remains strong ahead of a hike in the consumption tax rate next year and higher government spending on infrastructure projects.

Strong output from the country’s auto industry has also ensured robust demand for 400-series stainless products.

That demand has allowed the company to ramp up its output and it is now operating its Kashiwa plant at full capacity.

At the same time, stockpile levels among dealers have continued to fall. Inventory levels in October, at 1.86 months’ worth of demand, fell to their lowest levels in over a year, NSSC noted.

But despite robust demand and falling stockpile levels, rising input costs such as that for electricity means that profitability is still short of the company’s target and therefore customers need to expect further price rises in the months to come.

Meanwhile, NSSC remains firmly shut out of the export market in spite of the sharp fall in the value of the yen, which has helped boost the competitiveness of Japanese exports.

NSSC estimates that stainless prices need to be around the $3,000-per-tonne mark for it to be able to export at a profit.

Prices for 304-stainless cold rolled coil were at $2,365 per tonne cif East Asian port on November 29.

Stainless plate demand remains lacklustre, the company said, despite shipment volumes rising to over 8,000 tonnes in October for the first time in six months.

Although it said that new opportunities are being seen in fields such as shipbuilding and public infrastructure projects, they are not enough to dispel uncertainty over the future yet.

“In such an environment, we continue to assess market trends carefully in regard to orders,” NSSC said.