Stainless steel prices in Asia reach multi-year highs

The MEPS Asia average prices for grade 304 hot and cold rolled coil, in April, stand at their highest levels since August 2008. The rate of increases has accelerated, in recent months, predominantly driven by rising nickel costs.  

However, the upturn in Asian stainless steel prices was muted, in April, by Covid-related lockdowns in China, and currency exchange rate movements. 

South Korea 

Cold rolled coil transaction values, in South Korea, have climbed by 17 percent since the start of 2022 – reaching a fifteen-year high. End-users are reportedly unable to recover the cost of the inflated stainless steel prices.  

Domestic producer, POSCO, recently announced that selling values would remain stable for May, in order to attract and support local customers. However, a rise in June prices is likely, in an attempt to recoup the recent hikes in raw material costs. 

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Japan 

In Japan, flat product prices have risen by 30 percent, year-on-year. Domestic mills achieved increases of around JPY20,000 per tonne for austenitic grades, this month.  

Prices now stand at their highest recorded figure since June 2008. Further significant rises, in local currency terms, are anticipated in May, due to the yen’s devaluation against the US dollar. 

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Taiwan 

The largest rises across East Asia, so far this year, have been registered in Taiwan. Domestic prices of 300-series coil have risen by 63 percent, year-on-year. More than half of this increase took place in the first four months of 2022.  

Concern about being left with high-priced inventory is limiting distributors’ purchasing activity. 

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China 

Although China has recorded considerable price increases since the start of the year, those rises have been curtailed by weakening demand. Since March, the spread of Covid-19 infections has had a significant impact on the country’s stainless steel production and consumption.  

Suppliers report difficulties delivering material to customers, due to logistical problems arising from the lockdown restrictions. 

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Forecast 

The MEPS Asia average stainless steel transaction prices are forecast to increase, modestly, next month, in US dollar terms. Movements in domestic values will be varied across the region. Steelmakers will seek to recover their growing input expenditure, with mixed success.  

As the gap between local and international prices increases, export opportunities are likely to expand. This should help alleviate growing oversupply pressures in the region, in the coming months.