According to UK-based MEPS the rising cost of ferrochrome is pushing transaction prices for ferritic grades ever upwards and the MEPS North American and Asian average transaction values for type 430 cold rolled coil are at all time highs as of March 2008. It added that further substantial increases are expected in all regions of the world in March. MEPS said that “EU prices have not reached the lofty figures recorded in other regions because selling figures turned down in mid-2007 as the whole market collapsed after the massive fall in the price of nickel on the LME. A slight recovery is now in place for all grades. The most spectacular improvement is in the ferritic types.” MEPS added “Significant alloy surcharge rises will occur next month. Our research shows that substitution of austenitic steels by ferritics is continuing, despite the price of nickel on the LME currently standing at half its value in May last year. This is because customers are not confident that the metal will remain at its existing low level after speculation in previous years. Moreover, a rise in the cost of ferrochrome also affects the austenitic types in equal measure to the ferritics.” MEPS further added “It is now clear that the day of the non nickel stainless steel has come. These grades will take a greater share of the market in years ahead. The LME nickel price hiatus through 2006 created a permanent change in the potential for ferritic grades. Nickel producers have lost a substantial volume of future business as a result. The mills are now investing in plant and equipment to meet the growing demand. Customers continue to test for suitability.”
