According to a Meps forecast, the price boom in the global stainless steel sector is now under serious threat as several factors are coming together to indicate price weakness in the future. Meps said that Asian transaction prices are extremely low compared to those in Western Europe and North America and Chinese customers are not able to pay the current inflated prices being charged elsewhere in the world. Meps added that in other Asian countries, the mills do not have established alloy surcharge mechanisms and have difficulties in recovering the escalating input costs of nickel and chromium consequently Meps can now see a large disparity between prices in different parts of the world. Meps said that Asian SS, particularly Chinese, is being exported at competitive prices to all the major consuming countries. In the EU and US, distributors have built up their inventories of competitively priced material and are now off loading material into the market and as a result, orders on local mills are starting to dry up as customers can obtain cheaper products on short delivery times. Meps concluded that the substantial price discrepancy between Asian and EU supplies cannot be ignored. It said “We detect a high degree of uncertainty in Western stainless markets. Both distributors and end users are reluctant to build up stocks of locally produced material particularly in standard grades and sizes.”
