Stainless prices are under continuing pressure from slack demand and nickel weakness. Domestic producers have been unable to sustain increases in monthly surcharges for most types, although base price increases enacted earlier in the year seem to be holding. China’s stainless production and consumption is thought to be slumping.

Most domestic stainless steel surcharges are heading lower for June, according to American Metal Market (AMM). Types 201, 304 and 316 extras are declining in a range from (1.41) percent for Type 201 to (4.69) percent Type 316. Domestic producers have left Type 430 surcharges unchanged. Lower tags for nickel, manganese and moly explain the restraint.

LME's cash nickel contract averaged $9,668.61 per tonne in April, down from $10,230.43 per tonne in March. May saw further erosion, with the LME's cash nickel contract closing the official session at $8,810 per tonne ($4 per pound) on May 31, down (3.5) percent from a week earlier. Nobody sees a significant boost on the horizon, now that nickel exports are flowing again from Indonesia, and the Philippines dismissed an environmental official who had ordered the closure or suspension of more than two dozen mining operations.

Global stainless steel consumption is expected to slow to a growth rate of 4.0 percent in 2017 and 3.8 percent next year, down from an increase of 9.9 percent last year, according to the International Stainless Steel Forum (ISSF). Last year’s heady growth came as a surprise, and it’s anticipated the global market will adjust.

Global stainless production will reach another new high this year, however, according to MEPS. Last year’s output increased by more than 10.0 percent from 2015, but that growth rate is expected to slow to around 3.75 percent in 2017.