Three of the four largest domestic stainless steel producers decreased May surcharges for all types in response to falling tags for nickel, manganese, iron and molybdenum. ATI, AK Steel and NAS announced declines of a little less than 2% for Type 201, -3.9% for Type 304 and around 2.15% percent for Type 316.  Surcharges for Type 430 were reported dropping by about a third of a percent. Inventory overhangs, coupled with nickel dropping on the London Metal Exchange (LME), are leading to declines in stainless prices after a relatively robust first quarter, although most of the gains were attributable to January base price hikes.

MEPS International concurs that stainless prices in North America likely peaked in April. Despite nickel dropping to around $9,200 on the LME in late April, MEPS continues to forecast a rebound above $11,000 in the second half, although weakening of other raw material costs may work to counteract that market force.

Nickel’s predicted rise is largely due to predictions of a global market deficit. According to the International Nickel Study Group (INSG), the nickel market moved into a deficit of 49,700 tons in 2016 from a surplus of 91,400 tons in 2015. That could change with new supplies from Indonesia, which in January relaxed its three-year ban on exporting nickel ore.  A Citigroup metals research spokesman told the International Nickel Conference in late April that global stocks of nickel are holding up well, totaling more than 1 million tons at the end of 2016.