Asian Stainless Prices Rise on Supply Concerns
Global stainless steel demand remained weak throughout the summer. However, sentiment in Asia turned more optimistic after work resumed after
the Mid-Autumn Festival holiday early last month.
LME nickel prices started climbing in early September after Russian material was banned from UK warehouses.
Despite weak stainless demand, nickel inventories continued to fall, helping to sustain price gains.
Asian stainless producers are expected to try to raise domestic selling prices in October amid supply concerns.
POSCO, South Korea’s largest steelmaker, suffered heavy losses during Typhoon Hinnamnor.
It is reported that the stainless steel hot and cold rolling line was seriously affected by the flood in the company’s Pohang plant.
While evaluations are still ongoing, early indications are that the plant is unlikely to return to full production by the end of the year.
Under normal trading conditions, the withdrawal of such a large amount of product from the market would be extremely disruptive to stainless steel buyers.
However, while customer orders are expected to be canceled or delayed, this is unlikely to lead to a supply crisis.
POSCO believes that most distributors, both local and overseas, have sufficient inventory to withstand any major impact.
Steelmakers in other regions are also well-positioned to absorb any additional demand.
Elsewhere in the world, stainless steel producers have been forced to idle capacity due to high energy costs and slow sales.
Inventories of hot-rolled and cold-rolled sheets remain high in Europe and the United States.
Most buyers report that they have enough material to finish at least by the end of the year.
As a result, many distributors are recommending further production cuts to balance supply and demand.