Why did global stainless steel prices increase this year?

Europe saw the steepest increase in stainless steel prices since the beginning of the year and South Korea, the lowest.

The European trade price of the 304 stainless steel cold rolled grade was $4,707/tonne (t) in Dec'21, up 60% compared to the levels seen from beginning of the year. Compared to the beginning of CY'20, it surged 112%. Although the increase has slowed since September, the transaction price in Europe is estimated to have reached an all-time high.

The bullish trend in European stainless steel cold-rolled prices was, however, not simply on account of rising raw material prices such as nickel, chromium, and molybdenum and electricity costs. The supply chain has been greatly affected by the global quota effect caused by the European safeguards like anti-dumping and countervailing duties on products from China, Taiwan, and Indonesia.

Under these supply conditions, it is difficult for only the European producers to keep pace with the demand for stainless steel cold rolled products such as home appliances and automobiles, which recovered significantly this year. This caused prices to rise sharply compared to other regions.

North America saw the second highest price increase after Europe. In North America, the December 304 stainless steel cold rolling price was $4,129/t, up 42% from the beginning of the year. Compared to the beginning of 2020, it rose 71%.

On the other hand, it was found that the extent of increase in domestic trade prices with China was less than that of Europe and North America. In the case of Asia, entering the fourth quarter, demand is sluggish and prices are bearish. It appears that the influence of China is high.

In Asia, the average year-end trade price increased by 34% compared to the beginning of the year. In the case of China, the trading price in December rose by 10.2% compared to the beginning of the year, although it began to decline in November. Compared to the peak in October of this year, it rose 39%.

In December, Chinese trading prices were up 29% compared to the beginning of 2020.

The average domestic 304 cold rolled transaction price rose 25.2% from the beginning of the year. Compared to the beginning of 2020, it is 42.4% higher. The increase in domestic transaction prices was the lowest in all regions.

This is because the biggest impact was POSCO's price increase which was smaller than that of other regions, and raw material prices.

In the case of domestic spot prices, some psychological contraction has been triggered due to the downward trend in China since November and is showing a slight weakness, but the possibility of a sharp decline is limited due to the influence of anti-dumping duty.