Stainless steel producers around the world are trying to lift their selling prices, by more than any adjustment for raw material costs, after a long period of stable, very low figures. Basis values were stuck at a point very close to the mills’ breakeven levels for a long time. The steelmakers are now taking advantage of a combination of market factors to put forward price advances that will make their businesses more profitable.

Purchasing activity has increased, in several regions. This is not driven by underlying demand, in all cases. Restocking and anticipation of rising prices have affected some buying decisions. On the supply side, scarcity of material from China, particularly cold rolled coil, has had a major influence on recent price agreements.

In North America, where there has been a slight upturn in real demand, local producers introduced cuts to their list price discounts – effectively, raising basis values – in January and March of this year. Following the announcement of an investigation into alleged dumping, customers are reluctant to buy Chinese steel. With the resultant tightening of supply and extended delivery lead times, the mills applied another increase, in May, and further increments are not ruled out.

China’s home market has been quite strong, in recent months. As a result, the volume of material available for exports to other countries in the Far East has been restricted. Buyers in South Korea and Taiwan have, therefore, been forced to accept the hikes presented by their domestic producers, in order to secure deliveries.

Antidumping measures against Chinese and Taiwanese cold rolled coil have been in place, in the European Union, for some time. Although this has not yet had an inflationary effect on transaction values, it brought about a closer balance between supply and demand. Supported by more expensive import offers, local producers are expected to have some success in securing higher basis figures, in June.