Seoul: Leading steel producer POSCO said on Tuesday it would cut stainless steel prices by up to 10%, reversing two earlier price hikes this year, as prices of nickel (a key input in the alloy) slide, writes the Economic Times. The decision follows a 25,000 tonne output reduction in July and a similar cut this month by the South Korean firm to tighten market conditions, as buyers delay product purchases on expectations of price cuts.
"Despite low inventory, buyers have been delaying purchases and we expect this price move to help normalise market conditions," a POSCO spokeswoman said.
POSCO said it will lower the price of the popular 300-grade hot-rolled stainless steel products by 400,000 won ($386.9) to 3.65m won per tonne from Aug. 18, and prices of cold-rolled goods by the same amount to 3.92m won.
Prices of rustproof stainless steel, used in products ranging from kitchenware to machinery and aircraft, have come under pressure recently as prices of nickel have declined since early March.
The price of nickel, an anti-corrosive additive used in stainless steel, fell to two-year lows earlier this month and was trading at around $17,900 a tonne, down nearly 50 percent from a March peak. The decline has been attributed to concerns over weak demand from the key stainless steel industry and the prospects of rising mine supply.
POSCO, which raised stainless steel prices by a total of 650,000 won in March and April, reported record profits in the second quarter, as its stainless steel division swung to a profit and it raised prices of carbon steel products.
Nickel accounts for around 80% of the cost of making stainless steel. [13/08/08]
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