According to Meps, alloy surcharges on austenitic grades of stainless steel flat products will fall again this January. Type 304 alloy surcharges will be at a 16-month low in Europe, and at a two-year low in the USA – this is in spite of some USA mills having added an energy component onto the figure from November. The falls follow declines in raw materials costs. Chromium, unalloyed scrap and nickel are all well down from the peaks they reached earlier last year. It is nickel that has the biggest influence on surcharges, and the LME’s monthly average settlement price fell to just over USD 12,100 per tonne in November from nearly USD 14,900 per tonne in August. Nickel prices have staged a surprising resurgence in the last few weeks. Since mid-November, the LME settlement price has changed from below USD 12,000 to over USD 14,000 per tonne. In the first week of December alone, the cash nickel price jumped 9.5%. Nickel users have been running down their stocks. Cuts in stainless production have reduced demand and inventories of the metal in LME warehouses stand at a two-year peak. Nevertheless, the nickel price is being driven upwards. January could be the month that alloy surcharges bottom out. The metal’s price should go down as new production capacities come onto the market, and suggest alloy surcharges may not continue going up for very long.