Stainless Monthly Metal Index Update
The Stainless Monthly Metal Index (MMI) showed little movement, registering a 1.69% increase from August to September, landing at 1.69% overall.
US Stainless Steel Prices Steady in August
In August, US stainless steel prices remained stable. Following several announcements in recent months, mills have managed to maintain an upward trend in base prices. This has somewhat reversed the historically high discounts seen in previous years.
Lead times for stainless steel mills seem consistent as well. This stability hints there won’t be significant monthly shifts in the market. Supply for certain products appears tight, especially for brightly annealed options compared to Austentix. However, buyers haven’t reported any noteworthy shortages, particularly for standard grades like 304.
On the demand side, while not much has altered, the 50% tariff on steel products has given domestic manufacturers an edge in the US market, resulting in increased production capacity. This is interesting, considering the ongoing contraction in the US manufacturing sector. Various manufacturers have indicated plans to ramp up production in response to trade barriers, but realizing substantial increases in US stainless steel consumption may take some time.
Looking Ahead to Q4
For now, mills are taking advantage of higher price floors as buyers lean towards sourcing materials domestically. Even though the US market is on the softer side, manufacturers are preparing for potential shifts induced by evolving trade policies and geopolitical tensions. This could keep prices stable through the third quarter, but who knows what next year might look like? Suppliers seem to agree that further discounts are unlikely as the contract season approaches. The current terms don’t seem to warrant more increases; however, Mills are focused on maintaining their current standing.
There’s some debate on what will follow after contracts are signed. Recent US trade agreements with the EU and UK suggest there’s a possibility for tariff allocation agreements. As noted by Outokumpu, the European stainless steel market showed weakness in the second quarter. Duty-free shipping from that region could make things more competitive for buyers seeking to safeguard their materials. Meanwhile, negotiations with Canada and Mexico are ongoing, which could pose another challenge for US stainless steel producers.
Beyond Trade Policy Changes
It’s interesting to think that none of the countries that could secure quota arrangements are among the most affordable offshore stainless steel sources for the US. For instance, materials from Vietnam and Taiwan have seen significant issues.
Aside from trade policy shifts, North American stainless has heavily invested in expanding its capacity. In 2023, the Ghent facility will see enhancements including new cold rolling mills and upgrades. Although there’s no official completion date, expectations are set for possibly late 2025. Unless demand rebounds significantly, the combination of potential quota trading and enhanced US capabilities might give buyers more leverage.
Nickel Prices Remain Steady
In a counterbalance to the increased volatility observed in stainless steel prices, nickel prices have remained fairly stable this year. This has translated into a more modest surcharge since early 2025.
Although the nickel market is currently oversupplied, there’s a lack of strong downward momentum that might push prices down further. Recent low prices and regulatory infractions have led to many closures in the nickel industry, and if prices dip lower, it could result in reduced capacity.
India’s nickel industry continues to grow, contributing to global overcapacity concerns. Despite previous overestimations of demand from the EV sector, increasing stocks and a shortage of global stainless steel demand complicate the picture. The LME inventory is at a four-year high, and the same can be said for SHFE stocks. These conditions may hinder significant rises in nickel prices in the near term.
