Japan’s largest stainless steel producer, Nippon Steel and Sumikin Stainless Steel (NSSC) has fallen in line with European mills and conceded to a rise of 20 cents per lb in second-quarter prices for South African ferro-chrome, taking charges up to $1.43/lb.
“Basically, we believe that the hike in the Q2 charges is 100% due to supply-side factors, such as power shortages, the strong Rand and high inflation in South Africa. Still, we have little option but to accept the hike,” a senior company official told Metal Bulletin.
“Although domestic demand for 400-series is reasonably stable at the moment, we cannot say demand is strong enough for us to be able to easily pass on the hike to our customers. We do believe the increase in ferro-chrome charges will have a huge impact for us,” he said.
But the official also pointed out that second-quarter demand is usually “not too bad” and that sales should be further boosted, at least in the short term, given that stockists had largely bloated inventory adjustments by the end of the last quarter and will now be looking to restock.
He also noted that demand from automakers, the biggest consumers of 400-series sheet, remains robust.
The last time the company adjusted its domestic 400-series prices was in August 2011.