RESEARCH: Stainless price rally picks up speed

We spoke in our previous tracker of stainless steel prices ending 2020 on a high. That trend has continued during early 2021 and, in fact, the upward rally in prices has increased its momentum.

Compared with the monthly price increase of some 5% seen at the end of 2020, prices for grade-304 stainless steel in all major markets have increased by an even-more-impressive 15% since the turn of the year, with prices boosted by rising alloy surcharges and base prices.

The rise in alloy surcharges is an automatic component of stainless steel prices, of course, and reflects changes in the cost of iron and nickel in particular over the past month. These increases are, in turn, directly passed on to the consumer. And surcharges look likely to remain elevated, if not to increase further, through the first half of this year – particularly given the pricing moves seen in the chrome market in January.

Base prices increasing is an interesting phenomenon, however, given that stainless steelmakers in both Europe and the United States have struggled to increase them in any sustained manner since late 2019. That dynamic may now be changing, however, as we discuss in our regional analyses this month.

While not in as strong a position as their counterparts in the carbon steel industry, stainless steelmakers in Europe and the US look set to enjoy rising margins over the coming months as they benefit from reduced competition from imports and some early signs of a pick-up in local demand.

Click here to view the Stainless Steels Tracker in full.