1&#;The cost of materials
The composition of stainless steel, that is stainless steel raw materials, stainless steel raw materials are mainly iron, chromium Cr, nickel NI, the price of these raw materials plays a decisive role in the price of stainless steel, raw material prices rise, the price of stainless steel will rise accordingly.
The stainless steel market pays close attention to nickel prices, mainly the LME nickel price trend, but also pays attention to the price trend and dynamics of iron ore, molybdenum, and other non-ferrous metal prices trends.
Although stainless steel products such as stainless steel wire, stainless steel strip, and stainless steel strip coil are mainly made of chromium, the nickel content is low and volatile. Throughout history, the price of stainless steel has followed the price of nickel to a large extent. However, it does account for a small portion of the quality of stainless steel, 304 accounts for 8% and over 60% of the cost. So the price of nickel needs to be closely monitored.
In addition, tracking energy costs can be an indicator of market conditions and plant cost structure. It takes a lot of heat to melt steel.
2. Supply and Demand
As with any commodity, supply and demand are important factors in determining the price of stainless steel. The higher the demand, the lower the supply, the higher the price. Or, vice versa: the lower the demand, the higher the supply, the lower the price.
Stainless steel prices depend not only on the current supply and demand but also on the forecasted supply and demand. The more information available and the better the forecast, the less volatile the price will be. We must also strive to understand supply chain inventories at every step of the process, from the steel mill to the end-user. Inventories can decouple and moderate the supply-demand balance in the short term
Supply and demand have been constantly guiding prices, and inventories are a better reflection of the current market supply and demand. Supply exceeds demand, stainless steel prices fall, and inventory buildup is large. Supply exceeds demand, the price rises, and the inventory becomes tight.
3&#;Substitutes
If the price of a series of stainless steel is too high, or stainless steel raw materials, the lack of a certain element required, the stainless steel market will appear this series of stainless steel substitutes. Alternatives generally have many advantages, such as low prices, cheap materials, good performance, and so on. So the emergence of substitutes can also cause price fluctuations.
4, Production dilemma
In terms of production cost factors, take stainless steel grade 430 as an example. This grade has been in short supply recently, in large part because some steel mills have reduced production.
Part of the reason has to do with the extra time and cost required to produce the grade. For example, the 400 series starts with more carbon steel scrap, which means it requires more argon gas to melt than stainless 304. Compared to 304, 400 series takes longer in the furnace.
In response, some buyers of the metal turned to the import market, namely China, which received $430 earlier in the year. Recently, however, even foreign steelmakers have begun to limit production to North America as domestic demand has increased.
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5, The grade of stainless steel
Historically, nickel has had the greatest impact on these surcharges. But chrome also has some impact, as Nick Webb, director of commodity hedge risk management at Ryerson, notes
But another thing to consider is molybdenum. This is used as a hardener in stainless steel 316 to improve corrosion resistance.
As the price of molybdenum has increased, it has affected the surcharge for 316 stainless steel.
6, Industry trends
Prices are also influenced by demand from the various industries in which stainless steel is used. For example, if the real estate industry is strong, demand for stainless steel may be higher; the same is true for construction, machinery, appliances, and other industries that rely heavily on stainless steel.
7, Freight costs
The high cost of shipping the materials used to manufacture stainless steel and manufactured goods directly contributes to the high price of stainless steel,
8, The time of the year
Holidays, weather, and seasonal highs and lows can affect the production of new products, which can raise or lower demand. We've also seen how seasonality affects shipping patterns and modes of transportation. And, of course, prices fluctuate as demand changes.
9, Political Factors
If there is a possibility of increasing tariffs on stainless steel raw materials and products because of political factors in some countries, this will directly lead to higher stainless steel prices.
10&#; Environmental protection policy
The stainless steel industry is also a major energy consumer, in the process of melting the production of stainless steel requires a lot of energy consumption, and emits a lot of waste gas wastewater. With the future requirements of environmental protection will become higher and higher, the requirements of enterprises will also become more and more stringent, which will directly improve the production cost of stainless steel.
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