- Weak domestic currency raises cost of imports
- Steelmakers adjust prices amid rising input costs
SteelDaily: The global stainless steel market is entering March 2026 under mounting pressure from geopolitical tensions, rising energy prices, and currency volatility, which are collectively testing cost support levels for producers.
Escalating tensions linked to the US-Iran conflict have raised concerns over potential disruptions to shipping routes around the Strait of Hormuz, a key global energy transit corridor. As a result, crude oil and liquefied natural gas (LNG) prices have been trending higher, increasing input costs for steelmakers and other energy-intensive industries. Rising freight costs and logistical uncertainties have also pushed up prices of key stainless steel raw materials such as chrome ore and ferro molybdenum.
At the same time, currency fluctuations are adding to cost pressures. The Korean won has weakened significantly against the US dollar, with the exchange rate approaching the KRW1,500/t level amid geopolitical uncertainty and a stronger dollar. A weaker domestic currency raises the cost of imported raw materials, further tightening margins for stainless steel producers.
In response to rising input costs, major steelmakers have begun adjusting their pricing strategies. POSCO has reportedly increased its March stainless steel shipment prices by KRW 100,000, reflecting attempts to pass on higher production costs. However, market activity remains sluggish as downstream demand continues to recover slowly, limiting the ability of producers to fully transfer cost increases to buyers.
Nickel prices, a key component in stainless steel production, have remained relatively range-bound around the $17,000/t level. Market participants noted that some investment funds have shifted capital away from base metals into traditional safe-haven assets such as gold, the US dollar, and government bonds amid rising global uncertainty. Nonetheless, ongoing policy developments in Indonesia’s nickel sector continue to influence supply expectations and may shape price trends in the coming months.
Overall, while nickel prices themselves may show limited short-term movement, broad increases in energy, logistics, and alloy input costs are expected to keep upward pressure on stainless steel production costs in the near term.
Note: This article has been written in accordance with a content exchange agreement between SteelDaily and BigMint.
Leave a Reply