September alloy surcharges in Europe will fall by around €85/tonne ($97/t) while the projection for October is of a €162/t dip compared to September, stainless steel buyers and sales executives tell Kallanish.

This is due to the continued falling nickel price and weak demand for stainless finished products, especially tubes and flats. Base prices have remained stable while the European market at the moment is calm and “… frightened”. Buyers are putting off their purchases and a heavy destocking process will take place over the next two weeks, sources say. In the UK Tata Speciality Steels has significantly lowered its published monthly alloy surcharges for the second consecutive month (see related article).

“For the first six months of the year stainless steel makers’ financial results were good. However, worse results are expected in the second half together with stock write-downs,” one source comments. Historically and for financial reasons in September customers in Europe do not buy and tend to get rid of stocks.

Stainless scrap prices are also expected to keep sliding in September, following the trend of finished products, Kallanish hears.