Stainless steel price rises on the horizon for 2023

22nd December 2022

This year has been another turbulent period for the global stainless steel industry. However, despite the volatile market, companies throughout the supply chain will post strong financial results. In most cases, a proportion of the profits made earlier in the year will survive the change in conditions experienced during the August to December period. 

Despite the slowdown in activity in the second half of this year, many global market participants remain cautiously optimistic regarding the prospects for 2023. However, most agree that geopolitical and economic issues will continue to pose a downside risk to the sector.  

Furthermore, destocking activity among distributors and service centres is likely to continue into January, at least. This, combined with reduced demand expectations from the automotive and white goods sectors, is likely to result in tepid buying conditions in the first quarter. 

Nevertheless, as the end of 2022 approaches, stainless steel prices remain at elevated levels, compared with pre-pandemic values, in all regions.  

The highest prices across East Asia, this month, are in Japan, where selling values of 304 cold rolled coil have risen by over fifty percent and those of 316 by more than forty percent, since December 2021. South Korean and Taiwanese selling values also remain inflated, despite having dipped in the third quarter. 

In the US, prices in 2022 have been predominantly driven by the movements in the mills’ alloy surcharges. However, when combined with reductions to buyers’ discount levels, this has resulted in the US having some of the highest global stainless prices.  

The 304 flat product surcharge, published by North American Stainless, will rise to US$2950 per tonne in January, while the 316 extra will jump to US$4480 per tonne. This is due to increases in the costs of molybdenum, nickel and ferrous scrap during the reference period.  

Furthermore, if nickel and molybdenum values were to remain at the same high levels during January, then the US alloy surcharges would increase by a further US$200 and US$300 per tonne, in February, for grades 304 and 316, respectively. 

The MEPS European average transaction value for 304 cold rolled coil, in December, stands at approximately €3050 per tonne – more than €2000 per tonne less than the price peak recorded in May this year. However, it remains approximately €1000 per tonne higher than pre-pandemic figure of December 2019.  

Along with those in the US, the European alloy surcharges for type 304 and 316 will be higher in January, but unlike in the North American market, it is likely that these rises will be met with resistance from buyers, owing to weak demand. 

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