|
Stainless steel market at a standstill with little evidence of revival
November 2002
Much of the bounce went out of the global stainless steel market in the second half of the year. The decline in the economic and industrial performance in the EU and North America was the big factor in the weakening sentiment. These two regions represent half of the world's consumption.
The best hope for improvement in the fortunes of this sector lie with the pricing of nickel on the LME. The value has stayed above $US 7000 per tonne since 24 October. This should lead to an increase in alloy surcharges in the early months of next year and could prompt a degree of inventory building by the consumers. Demand on the mills would increase and price rises may ensue.
A significant change has occurred in recent months in the pricing scene. Since last June our US transaction price for the benchmark product - type 304 cold rolled coil - has fallen below the EU average value. Historically, US transaction prices have been above the EU figures. This transformation is mainly the result of a 6 percent appreciation of the Euro against the US Dollar over the period. Basis prices have changed little in either region. In fact, a small increase was achieved in US figures.
On the plus side, output in both areas has been higher this year relative to 2001. The US figure has been up because of new capacity coming on stream and a small benefit from higher duties. In contrast, a plant closure has been announced in the Canadian long products segment.
Asian stainless prices have shown a reduction during the second half when measured in US Dollars. Again, this is not the result of significant changes in selling prices in the national currencies. The change has been caused by a depreciation of the Yen, Won and Taiwanese Dollar compared to the US Dollar in recent months. The average decrease has been approximately 5 percent.
The Asian producers have been more circumspect this year on their levels of output, if you exclude the Chinese. They have been prepared to maintain supply at, or near, the average of the previous twelve months. However, a significant amount of uncertainty has surrounded the Asian stainless steel scene after the Chinese authorities implemented temporary safeguard measures in May to restrict the volume of imports going into the country.
The Chinese safeguard measures have been prolonged for a further two and a half years. The annual tariff free quota for cold rolled coil to May, next year, will be near to 600,000 tonnes. This will be expanded to just over 650,000 tonnes over the following twelve months and increased by an additional 65,000 tonnes to 2005.
|
|
Profile
Email
this page
12/May
Lamiera
07/Jun
MACH 2010
13/Sep
IMTS 2010