Stainless Steel/Mills announce production cuts

摘要

With the exception of the US domestic market, total transaction prices for 304 2mm stainless sheet fell in June and by up to US200 dollars/tonne. The euros 40/tonne reductions in Western Europe looked particularly severe in US dollar terms, owing to the significant strengthening of that currency against the euro in June, though it was in the Chinese domestic market where the price cuts were at their greatest. Not surprisingly, and as discussed in the last issue of the Nickel Chrome Molybdenum Monitor, the inability of Chinese suppliers to curb excess supply in the Chinese market has caused reverberations throughout the Far East. Having already reduced production in May, mills from Japan to Taiwan have announced fairly significant output cuts for the third quarter. In fact it is only in the USA where official production cut announcements are yet to be made. While the stability in stainless prices there indicates that US market fundamentals must be reasonably tight, cutbacks are as likely to occur here as elsewhere. After all, although apparent cold rolled consumption in the USA has actually increased by 1 percent year-on-year between January and April, total stainless shipments from service centres, which are mainly of CR material, were down by 5 percnet in the year to May. With stock levels increasing in consequence and US economic growth projected to slow this year, mills look likely to be faced with reduced domestic purchasing over coming months. At the same time, CR exports, which surged earlier in the year to levels similar to imports, and helped sustain high production rates, look likely to be curtailed. The more recent strengthening of the US dollar has started to make US prices look uncompetitive internationally, resting over US200 dollars/tonne higher than levels in Western Europe, when at the start of the year they were more than US100 dollars/tonne lower.