Japan Stainless Cold Sheet Price Hits 500,000 yen/t

Market price of nickel series stainless cold rolled flat steel reached 500,000 yen per tonne for SU304 grade with 2 millimeters thick around Tokyo, which is 200,000 yen higher than the level in the beginning of the year and represents actual record high. The distributors try to pass higher cost price on the reselling price when the makers increase the selling price to transfer the higher nickel and other materials cost. The stainless flat steel market price could reach 540,000 yen when Japanese stainless makers are expected to increase the selling price again in December to reflect higher nickel price.Nickel price was averaged US$ 14.6 per pound in November, which increased by US$ 1 from average in September and was slightly lower than October average. The price keeps the historical high level when the price hit US$ 15.6 on Monday. Japanese stainless makers including the largest stainless maker, Nippon Steel & Sumikin Stainless Steel (NSSC) increased the selling price every month since January 2006 under the mechanism to reflect price change of raw materials. They also increased the base price under tight supply. Distributors’ inventory keeps decreasing in rate for the shipment when the makers reduce the supply to distributors by around 30% and ship more for contract users and export market. The nickel series stainless flat steel inventory decreased to 1.53 months of shipment in October, according to national association of stainless coil centers. The inventory keeps low level compared with traditional normal level of 1.7-1.8 months. Japanese stainless industry recognized the market price hit record 535,000 yen per tonne in July 1980. However, the price was official price of makers and the makers had no mechanism to reflect raw materials price. Current market price is now recognized as historical record level in actual basis. Nickel price is expected not to experience major drop at London Metal Exchange when LME nickel inventory is less than 7,000 tonnes, which is 80% lower than the beginning of the year, and the stainless supply is tight. Japanese stainless interests see nickel price keeps more than US$ 13 per pound through the first half of 2007.