Stainless market loses confidence as volatility remains

Apr 30, 2012 | 07:00 PM | AMM staff

Tags  North American stainless steel market, LME nickel, stainless steel imports, ThyssenKrupp AG, Vale SA, AK Steel, James Wainscott, International Stainless Steel Forum Richard J. Harshman

The domestic stainless steel industry saw a strong pickup in the first quarter of this year, but volatility in the nickel market and some concerns about the softening of overall demand have created a gulf between the optimists and those who worry that the rest of the year might be a struggle.

Well-stocked stainless scrap consumers reportedly bought less in March as they waited to see where the nickel market would land. Earlier in the year, stainless mills were said to be taking a lot of scrap on the back of solid order books, with one foreign-owned mill reportedly unable to secure enough material (AMM, Feb. 23).

The slowdown in buying came as stainless scrap prices fell due to a decline in the London Metal Exchange cash nickel price that began in early February.

"We’ve seen a little bit of a breather because of the drop in nickel prices," one supplier source said. A source at another suppler said, "Demand is a little bit down. Buyers are satiated with supply at the moment."

Some scrapyards are said to be sitting on material because of the lower broker buying prices. "The flow of material is not that good right now; people are sitting on it a little longer," one broker said.

The fall in nickel has led some distributor customers to revert to a more normal ordering pattern. "The recent rush to buy has come off a little bit, but nothing dramatic. If you’re a buyer, there’s no advantage to waiting with your purchases. You might save a few pennies on the surcharge, but nobody is delaying their purchases (because of that)," a Midwest service center executive said.....

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