Stainless Steel Prices Explained
Stainless steel prices remain sour this year as the global health economy experiences uncertainty. Failure of the two Chinese ( the world’s largest supplier and consumer of steel ) property developers and the healthy Russian steel output offset its cooling prices.
Thus, 2023 is a tough year for the stainless steel market.
Why are stainless steel prices fluctuating?
1. Supply and Demand
Stainless steel prices, like those of most commodities heavily rely on the principles of supply and demand. When demand for stainless steel surges or there’s limited supply, prices tend to rise.
Conversely, when the need is low or there’s an abundance of supply, its value will likely decrease.
2. Raw Material Costs
Stainless steel prices rest on the expenses associated with essential raw materials, specifically iron ore, nickel, chromium, and molybdenum.
Therefore, fluctuations in the prices of these raw materials directly impact the production cost of stainless steel.
3. Global Economic Condition
Economic variables like growth, trade policies, and geopolitical occurrences can affect stainless steel costs.
For example, strong economic growth usually results in heightened stainless steel demand for construction, manufacturing, and infrastructure ventures, causing its price escalations.
4. Energy Prices
Metal production builds on energy resources, thus, the variation in fuel and electricity generation costs gets a hold of stainless steel prices.
For instance, higher energy costs can increase the expenses incurred during the various stages of production such as smelting, alloying, rolling, and finishing.
Which variables impact the price of stainless steel?
- Supply and Demand
- Raw Material Costs
- Energy Costs
- Trade and Tariff Policies
- Currency Exchange Rate
- Global Economic Condition
- Environment Technology Advancement
Where does stainless steel come from?
Stainless steel or inox steel is an alloy consisting primarily of iron, chromium, and carbon. Also, these iron-carbon alloys contain appreciable concentrations of other alloying elements.
Adding a small amount of non-metallic carbon to iron trades enhances its ductility for greater strength.
Here’s a general overview of the stainless steel production process:
1. Raw Material Extraction
- Iron Ore – Iron ore is mined from the earth and processed to extract iron which is a key component of stainless steel.
- Chromium Ore – Similarly, chromium is obtained from chromite ore through mining and processing.
2. Smelting and Refining
Iron ore undergoes smelting in blast furnaces resulting in the production of molten iron. On the other hand, obtaining chromium involves an intricate refining procedure, typically conducted within specialized facilities.
3. Alloying and Mixing
The molten iron is combined with chromium and other alloying elements such as nickel, molybdenum, and other metals to form the stainless steel alloy.
The precise combination and proportion of these elements differ depending on the intended grade and properties desired for the stainless steel.
4. Forming and Shaping
The liquefied steel is molded into different shapes such as sheets, coils, bars, or other configurations, depending on the intended application.
5. Hot Rolling and Cold Rolling
Next, it’s processed through hot rolling and cold rolling processes to achieve the desired thickness and surface finish.
6. Heat Treatment and Annealing
These techniques are frequently employed to enhance the mechanical properties, hardness, and corrosion resistance of the material.
7. Surface Finishing
Depending on the application, it may undergo additional processes to achieve specific surface finishes like polishing, grinding, or coating.
8. Cutting and Fabrication
Stainless steel sheets or coils are cut and fabricated into various products, including pipes, tubes, fittings, and plates based on the requirements of different industries.
9. Quality Control and Testing
Throughout the manufacturing process, rigorous quality control and testing are conducted to ensure the stainless steel meets industry standards and specifications.
Top Applications of Stainless Steel
It is a highly versatile and widely used material due to its unique combination of properties, making it suitable for a broad range of applications across various industries.
For example, when exposed to air, chromium undergoes a reaction and creates a protective chromium oxide layer, preventing the metal from continued corrosion and potentially extending its durability.
Furthermore, stainless alloys are highly unreactive so they are suitable for food and medical uses. Here are some common uses of stainless steel:
1. Architecture and Construction – Structural components in buildings and bridges use stainless steel due to its strength and corrosion resistance. Handrails, guardrails, and ornamental features for aesthetics are examples of its end-products
2. Automotive Industry – Exhaust systems, mufflers, and other automotive components employ this metal due to its high-temperature resistance and corrosion resistance.
3. Aerospace and Aviation – Stainless steel is important in making aircraft structural components and engines due to its high strength-to-weight ratio and resistance to extreme temperatures and corrosion.
4. Medical and Healthcare – Their biocompatibility, corrosion resistance, and ease of sterilization properties find their way into surgical instruments, medical devices, and equipment.
5. Water Treatment and Desalination – Pipes, tanks, and equipment for water treatment and desalination plants due to their corrosion resistance and longevity.
What is the future price of stainless steel?
Stainless steel is essential in making industrial equipment as it’s durable and easy to clean.
Additionally, it is used in cookware, cutlery, surgical instruments, major appliances, vehicles, construction material in large buildings, and storage tanks and tankers for chemicals and food products.
Its market growth is driven by the rapidly growing automotive industry and the product’s ability to resist corrosion coupled with rising manufacturing for recyclable material. Overall, the estimated price of stainless steel will be around $1,200 to $1,500 per ton in 2028.