While the carbon steel market tends to grab most headlines with regards to higher prices and tight availability, it’s not the only industrial metal experiencing these conditions.
What is the Price of Stainless Steel?
Watch more here:
Like with other metals, the price of stainless steel is driven largely by the price and availability of the commodities that make up the grade. In the case of stainless steel, that includes nickel and chrome.
That price impact is felt by you in form of the stainless steel surcharges. These are additional charges added to the base price per pound of an alloy typically vary by mill. Typically, the base price for each is established using the following:
- Production Cost
- Yield Factor
- Supply-demand Fundamentals
The Production Dilemma
In terms of the production-cost factor, look at stainless steel grade 430 as one example. This grade has been in short supply as of late, due in large part to the fact that some domestic mills have reduced their production levels.
Part of that reasoning relates to the additional time and cost it takes to produce this grade. For instance:
- The 400 series starts with more carbon steel-based scrap, which means it takes much more argon to melt than stainless steel 304, for example.
- The 400 series spends more time in the melt furnace compared to 304.
In response, some metal buyers turned to the import market, namely China, to get 430 earlier in the year. But as of late, even foreign mills have begun to limit their production for North America due to heavier demand domestically.
The Alloys Behind the Grade
Historically, nickel has had the biggest impact on these surcharges. But chrome has a certain impact as well, as described by Nick Webb, Ryerson’s director of risk management, commodities hedging, below:
But another to consider is molybdenum. This is used as a hardening agent in stainless steel 316 to improve corrosion resistance.
As the price of molybdenum goes up, it impacts that 316 stainless steel surcharge.
What is the Current Price of Stainless Steel?
For a monthly update on the price of stainless steel, as well as that of all other metals, be sure to sign up for Cup o' Joe with Nick Webb.