Stainless steel enters H2 2026 at approximately $2,950/tonne for 304 grade, up 8% year-over-year, supported by nickel premiums and chromium supply constraints. Global stainless steel production is forecast at 62 Mt in 2026, up 3% from 2025.
China produces 58% of global stainless steel at 36 Mt, with Tsingshan, Baosteel, and TISCO the dominant producers. Indonesian stainless production is growing at 15% annually as Chinese producers relocate capacity to access nickel feedstock.
Nickel premiums, representing 60-70% of stainless production costs, have risen 18% year-over-year. The nickel content in 300-series stainless (8-12% nickel) creates direct cost pass-through from LME nickel prices.
Chromium supply, essential for stainless steel's corrosion resistance, faces constraints from South African logistics disruptions. Ferrochrome prices have risen 12% year-over-year, adding $150-200/t to production costs.
Price projections for H2 2026 cluster at $2,800-3,200/t for 304 grade.
Stainless steel buyers should secure H2 requirements at $2,800-3,000/t through fixed contracts. Nickel volatility creates upside risk. For fabricators, consider 200-series substitution where corrosion specifications permit. Budget $3,000-3,500/t for 2027.