Posco, Asia's biggest maker of stainless steel, and rival Jindal Stainless Ltd. cut prices of the rust-resistant metal after the cost of nickel declined.
Posco cut prices by as much as 10 percent from Aug. 18, the first reduction this year, Ko Min Jin, a spokeswoman for the Pohang, South Korea-based company, said today. Jindal,
India's largest producer, dropped prices by more than 5 percent.
Nickel has slumped 32 percent this year as rising supplies outpace demand from steelmakers. World stainless-steel demand probably won't recover until early 2009 as soaring energy prices and a property slump in major economies curb consumption, MEPS (International) Ltd. said July 31.
“The decision is part of our efforts to help the market normalize sooner,” Ko said in a telephone interview. “Some customers tend to hold back orders on expectations that falling nickel prices will lead to lower prices of the products.”
Nickel for delivery in three months fell 0.1 percent to $17,981 a metric ton on the London Metal Exchange at 5:44 p.m. Seoul time. About two-thirds of world nickel supply is used in stainless-steel production.
Posco is also cutting production by 25,000 tons, or 20 percent of a monthly average, following a similar reduction in July, Ko said. The price of its 300-series hot-rolled products will fall 400,000 won a ton to 3.65 million won ($3,528), and cold-rolled product prices will drop by 400,000 won a ton to 3.92 million won, she said.
Jindal cut the price of its 300-series by as much as $200 a ton to $3,600 a ton, Arvind Parakh, a director, said in a phone interview from New Delhi. That's the third reduction this year.
“Nickel prices have fallen and we need to change our pricing and pass on the benefit to our customers,” Parakh said.
Acerinox SA, the world's largest maker of stainless steel by output, and Outokumpu Oyj last month reported weak demand outlooks for their products.
Hyundai Steel Co., South Korea's second-largest steelmaker, may cut the price of its cold-rolled stainless steel products next month, following a similar move by bigger rival Posco.
The price may decline by around 400,000 won USD386) a metric ton, similar to Posco's reduction, from Sept. 1, Park Cheon Tark, a spokesman for the Incheon, South Korea-based company said in a telephone interview today.
Hyundai Steel, which earns about 10 percent of its sales from the rust-resistant metal, buys hot-rolled stainless steel from Posco and offshore suppliers to produce cold-rolled products.