In February, US stainless steel prices increased for both flat and long products. Rising mill input costs resulted in moderate gains in stainless steel transaction values worldwide. The price hikes recorded in North America were however more substantial than those in other regions. No doubt, the upward trajectory witnessed over recent months can be attributed, at least in part, to concern surrounding the outcome of the Section 232 investigation.
The growing cost of nickel, chromium and molybdenum will, almost certainly, put further upward pressure on stainless steel transaction values through to the second quarter of this year. Rises in alloy surcharges have been announced for March deliveries and additional increases are anticipated for those in April. Moreover, reductions in basis price discounts are expected in the near future as local producer confidence grows, following the Section 232 announcement.
The statement by President Donald Trump of a 25 percent tariff on all steel imports has been met with a mixed response by the local market. Whilst domestic steel manufactures are praising Mr Trump for his decision, buyers in the downstream supply chain have concerns regarding the potential for a shortfall in supply, as well as further price increases. Discussions of counter measures by representatives of countries worldwide are already emerging. The risk of a trade war looms.