NEW YORK Stainless steel base price hikes reportedly are sticking, although consumer demand has yet to strengthen, according to distributors.
Free-market prices for Type 304 cold-rolled sheet have risen to around $1.17 per pound from $1.16 previously, 304 coiled plate has increased to $1.16 per pound from $1.15 and 304 uncoiled plate has moved up to $1.97 per pound from $1.96.
The price increases were mostly attributable to rising raw material surcharges (amm.com, Aug. 21), with base price increases implemented at the beginning of August continuing to hold in the market, distributors told AMM.
"So far, everyone has stuck to their guns," one distributor source said.
"Its been a tough summer for everyone, but weve had a little uptick in the market as people try to get ahead of those price increases. And it looks like theyre sticking," a second distributor source said.
However, the base price increases have failed to spur demand in certain consumer sectors despite another increase set for Oct. 1, some distributors said.
"Theyre not really creating any demand, though were seeing some guys pull the trigger. Energy is good and the alternative fuels sector, those customers seem to have a bit more money and momentum. The automotive and truck aftermarket is kind of flat," a third distributor source said.
"I see dismal demand right now. Everything is flat. When nickel tanks, it doesnt help demand because people hold off and wait for a lower surcharge the next month," a fourth distributor source said.
Indeed, the London Metal Exchanges three-month nickel contract has fallen below the $14,000-per-tonne ($6.35-per-pound) mark this month after closing as high as $14,800 per tonne ($6.71 per pound) Aug. 16.
A fifth distributor source said that base price hikes and increased purchasing from distributors had only created an illusion of more consumer demand. "I feel that these price announcements have caused distributors to buy up whatever depot stock the mills had available, which lengthens lead times. What I dont see is an uptick in real consumer demand to motivate that much stainless production from the mills. I think the activity going on is about beating the next price increase," he said. "The mills are deluding themselves that theyre fat and happy again. I dont see nickel going back up, and I think what is going on right now is an anomaly."