According to Meps, price increases announced by EU mills during the previous month were successfully implemented. The cold-rolled market performed better than the hot-rolled. Rising alloy costs and nickel in particular contributed to a positive sentiment for type 304. Type 316 products have evolved in a different way. Molybdenum has fallen from record levels, thus impacting on surcharge. In some cases transaction prices for these grades have actually dropped. Price discipline amongst the mills and lack of import material point to further increases and so does the influence of nickel, whose recent strength had already an impact on alloy surcharges. Molybdenum shows increased evidence of weakness which may lead to a further reduction of surcharges for 316 grades. Stock levels are reported to be low and mills point to full order books for the coming months. German construction has finally emerged from a long-term decline but other key markets show weak growth or even stagnation. Seasonal factors have created higher scrap prices but this is likely to change in the second quarter 2006. For the second half of the year Meps expects a reversal of the positive trends with transaction prices being under increasing pressure. Basis prices should remain at higher levels than in 2005. The market sentiment suggests that, by the Summer, stock levels will be relatively high and some import material will be available from non-European producers. This should cause prices to retreat. In addition, raw material prices, nickel in particular, are forecasted to decline.