Late last year, MEPS predicted that there would be an upturn in demand for stainless steel, however this has not yet materialized during the first quarter of 2014. However, recent increases in nickel costs have lifted stainless transaction values and helped boost stainless purchases.
The mineral ore export ban imposed by Indonesia has had a small effect since the beginning of 2014, but other conventional nickel producers have stepped up their outputs in an effort to help reduce the shortfall. Nickel continues to be in surplus relative to current demand. The LME Nickel Cash price rose by US$2000 per ton between Feb. 25 and Mar. 26, which was an increase of over 14 percent. As a result, austenitic stainless steel transaction values have advanced and likely to continue doing so. Market insiders are reporting positive signs saying that consumption is sure to increase (either because of seasonal trends or because of genuine economic recovery).
This combination of factors may lead to contradictory behavior. For example, some suppliers will build their inventories, with hopes to sell everything quickly at a higher margin. OEMs for instance may be have restocked their supplies over the past few months when selling values were low so they may limit their purchasing now.