3 Key Factors Driving The Stainless Steel Prices Up In 2021 & Their Consequences On The Manufacturing Industry

The first quarter of 2021 has been the most volatile for the metal industry. Though the price trend of SS grades has been climbing up since the last year at a consistent rate of 5% to 7%, the price of SS grade 304 in all major markets has gone up by a staggering 15% in this year’s Q1.

This sudden surge is but a combined effect of different factors that may not be apparent all at once. Let’s take a brief look at each of these factors to understand their effects on the stainless steel industry.

The increased costs levied by stainless steel suppliers in India are a direct consequence of the surge in raw material costs. The surcharges of iron and nickel, in particular, have been on the rise, adding to the manufacturing costs that the end-users will have to bear. In some areas, Galvanized coil prices have increased by over 50%, causing many producers to switch to affordable alternatives such as SS grade 430.

With reduced options for international supply and unstable government norms on road transport, the freight rates to move essential raw materials have gone up nationally and internationally. The most prominent effect was observed in Europe, where the shipping costs of transporting a 40 ft container which used to be about $2000 has surged to $10,000. A similar trend prevails in India as the full transport capacity of many industries is yet to be restored.

Though most trading and reselling outlets are actively getting more consumers, the stainless steel product manufacturing industries aren’t working at full capacity. Reduction in the workforce and the increasing raw material costs have directly reduced the production capacity of large-scale manufacturers. This shortage of base materials has, in turn, affected the costs of the available stainless steel products.

Our market specialists at Venus wires predict that this upward trend will continue through Q2 until the above factors stabilize. Being a leading stainless steel manufacturer in India and a prominent supplier to various countries, we only hope for the pandemic situation to improve to serve our clientele in the best possible way.