A look at stainless steel price movements through August reveals the ongoing battle being faced by stainless steelmakers in Europe and the United States while they try to pass on rising costs to consumers. In these regions, prices on most grades of stainless steel are little changed from July, rising by around 2% at most – not enough to cover the rise in costs being experienced. Nickel prices have risen by another 12% since late July.

The picture is different in Asia, where stainless steelmakers are at least able to cover most of their rising costs, if not improve their margins. Prices on the same products in China have increased by around 7-9% since late July. Chinese prices are still typically lower than those elsewhere, but the gap has narrowed significantly.

Such dynamics are evident when talking to market participants in Europe and the US. In comparison to a few years ago, when many complained of cheap imports arriving from China, the main complaint now is regarding local demand levels. Indeed, some producers are looking to export more material to China because demand growth has rebounded much more quickly there since the Covid-19 pandemic struck global economies earlier this year.

Certainly, we do not expect this to become a long-term trend. China and other countries in Asia have enough capacity, or are building enough, to meet their own needs. And so, European and US stainless steelmakers continue their attempts to hide behind trade barriers. This month has seen the European Commission begin proceedings to extend their trade duties on material from China and Taiwan. When demand growth does pick up in these regions, local producers should find themselves well-placed to benefit. Margins are unlikely to recover until next year, however.

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