According to MEPS, surcharges for type 304 flat products have almost doubled since January, and seem certain to rise again in September. This has propelled prices for many nickel-bearing grades to record highs.

MEPS said that in response, users of austenitic grades are casting around for alternatives, although stainless producers say they have not witnessed much substitution so far. This is partly because the price of many replacement materials has also gone up significantly.

Copper prices have risen by almost 60% so far this year and also stand at record high levels. Galvanized steel sheet prices are currently about 40% above those of January.

According to MEPS, stainless producers themselves are offering their customers a range of alternatives in an effort to prevent business being lost to non-ferrous or carbon steel materials. Such options include lower-nickel duplex grades and ferritic types.

Stainless increases seen for September

However, the analysts declared themselves “slightly bearish about the prospects for 2007,” predicated on a projected decline in nickel prices next year. “We forecast the MEPS world stainless steel transaction values peaking towards the end of this year and falling in mid-2007 to a figure close to current levels.”