Industrial Insight

Stainless | July 24, 2017

Stainless Steel MMI: Index Moves Up For First Time Since March

by Irene Martinez Canorea on JULY 7, 2017
Style: Market Analysis Category: Ferrous Metals, Metal Prices, Premium

The Stainless Steel MMI inched one point higher to 55 for our July reading, finding itself at the level as the July 2016 reading.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

This is the first increase for this sub-index since March 2017, when the Stainless Steel MMI reached 63 points after a four-point increase.

Surcharges in the U.S. mill surcharges have decreased sharply this month. Reductions have been recorded on a month-to-month basis, resulting in a 17.8% reduction for ATI’s 316 surcharge and 19.9% for their 304. MetalBulletin also reports a reduction in the alloy surcharges in Europe. Deliveries of grade-304 cold rolled stainless steel sheet have fallen by €52-62 ($58-69) per ton month-on-month.

Global prices of ferrochrome, one of the raw materials used to make stainless steel, has dropped to lowest levels this year. This reduction is caused by weaker demand from stainless steel mills in China, currently the top producer of stainless steel, as reported by Reuters. Two of the largest stainless producers in China (Taiyuan Stainless and Tsingshan Group) blame weaker demand on increased stocks of ferrochrome in Chinese ports.

The U.S. manufacturing PMI fell to 52.1 in June from 52.7 in May. This indicator has fallen below market expectations of 53, revealing a slowdown in business growth. Manufacturing PMI is at its lowest value since September 2016.

Chinese economic indicators, meanwhile, point to a moderation in Chinese growth.

China’s GDP is also expected to fall 0.1% this quarter. The Caixin Manufacturing PMI in China has increased this month to 51.70 points, 2.1 points above its previous value. This growth has beaten the market expectations of 49.5, caused by the faster rate of exports and output in the Chinese manufacturing industry.

The Section 232 investigations for both aluminum and steel (including stainless steel) have created additional price uncertainty. Europe is now beginning to express its concerns about the possible outcome of the investigations. A report on the investigations is due by January 2018, though there is speculation that Commerce Secretary Wilbur Ross will release his recommendations in July.

Nickel prices have also shown weakness this month, reaching an 11-month low of $8,680/metric ton. Recently, nickel saw a stabilization in its supply. The export ban has eased in Indonesia, allowing the country to maintain its position as the world’s largest nickel producer.


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About author

I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.







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