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Wall Ties and Standard Products Set For Price Increase

Over recent months ACS have been highlighting the threat of significant raw material price increases. As of Wednesday 1st February 2017 ACS’s standard products are set to rise between 7.5% – 10.5%.

Supply side factors have continued to dominate sustained stainless steel price increases throughout the second half of 2016 and the rates offered for the first quarter of 2017. These increases are a culmination of anti-dumping duties on material from the Far East, mills restricting production capacity, the continued increase in the prices of Nickel and Chrome, and of course the exchange rate volatility seen since the referendum vote.

Exchange rate volatility continues to make headline news effecting everyday staple products but they also heavily influence future metal price forecasts. The stainless steel mills are located overseas and the goods are traded in Dollars or Euros, and many of the components required to produce the metal are Dollar traded commodities.

http://www.ecb.europa.eu/stats/exchange/eurofxref/html/eurofxref-graph-gbp.en.html

The price of stainless steel is determined by a number of factors, one of which been the monthly surcharge that is added to the base price of the metal. Historically Nickel has been a major contributor to the volatility of prices, however February’s surcharge announced by the European producer Outokumpu, has not only been driven by the demand/supply of Nickel, but also by that of Chrome. The announcement of the February surcharge of £1230/tonne for grade 304 material represents an increase of approximately 90% over a 12 month period (Feb ’16 – Feb ’17).The European quarterly bench mark price for Chrome for the first three months of 2017 is 79% higher than the corresponding figure for 2016 and has been forecast to increase again in the second quarter.

alloy-surcharge-chart

 

coil-prices-chart

 

We are advising all clients to get our Specification Team involved as early as possible in their projects to ensure a value engineering exercise is completed and prices are stabilised.

“There really is no need to panic. As long as clients plan ahead and get us involved as early as possible, we can limit the impact of these increases” –  Tony Higson ACS Commercial Director.