The high-performance alloy SMO254 experienced a price decline in the US and German markets during February 2025, contrasting with the strong rebound in nickel futures on the London Metal Exchange (LME). This price divergence highlights the complex market dynamics affecting specialized corrosion-resistant materials amid varying construction sector health across key economies.

Key Takeaways:

• SMO254 prices fell 1% in US and German markets while nickel costs increased
• Nickel, the raw material, has gotten more expensive this month and year
• German building projects are still struggling, especially home building
• US construction has worker shortages and higher material costs from import taxes
• Higher inventories of alloy in warehouses, pushing prices down despite less nickel being available

In the US, SMO254 sellers are caught in the middle. Nickel costs are up, but demand from builders is down. While stainless steel alloy manufacture tried to charge more because of higher nickel prices, the 0.2% drop in January building spending made this hard to do. Stockpiles of this special steel have grown as projects get delayed due to limited workers and tight budgets.

Germany's SMO254 market is doing even worse as building work keeps falling across homes, businesses, and public works. Even though builders feel more positive about the future than they have since February 2022, few are buying high-quality materials. Companies selling SMO254 have had to lower prices to make sales, even as it costs them more to make the product due to higher nickel prices.

The gap between raw material costs and final product prices is hurting stainless steel alloy makers. While nickel is more expensive due to supply problems in the Philippines and stronger steel markets in China, sellers say too much competition and full warehouses are keeping SMO254 prices from rising. Imported SMO254 products being sold cheaply makes things even harder.

Different regions show different patterns for SMO254 demand. In the US, government projects could boost SMO254 use, while German demand depends on a planned government building program. In both places, buyers are waiting to buy SMO254 hoping prices might go down.

As per ChemAnalyst, the SMO254 market will likely stay tough in the coming months but might improve by mid-2025 if building picks up. While higher nickel prices may help prices rise, this will only happen if warehouse stocks go down and more end-users start buying, especially for chemical plants and ships where rust protection is worth paying more for. Makers might need to accept lower profits until building markets get better.