US consumption could still lead the stainless pack
Aug 28, 2012 | 07:00 PM
| Myra Pinkham
Despite this years worrisome volatility in nickel pricesincluding precipitous drops during the summermany in the market remain confident that a return to higher levels could provide a renewed glimmer of hope that the U.S. stainless steel market will regain at least some of the momentum it has lost.
But this isnt guaranteed, given concerns about the impact of continued economic weakness in Europe and Asia, still-high U.S. unemployment rates, the hotly contested presidential election, rising imports and increasing domestic production capacity.
Overall, the domestic market has fared better than stainless markets in most other regions of the world. In fact, business had been holding steady at a good demand level until late April or early May, according to Carl Moulton, senior vice president, international, at Pittsburgh-based Allegheny Technologies Inc. (ATI) and chairman of the Stainless Steel Industry of North America (SSINA).
The market has since softened. Currently, there is a gloomier economic outlook worldwide, Moulton said, adding that the effect of the nickel price decline cant be overemphasized.
After peaking at $21,880 per tonne on Feb. 8, the London Metal Exchange three-month nickel price fell to $16,090 per tonne at the start of June, then inched slightly higher throughout the month before retreating to a year-to-date low of $15,530 per tonne in early August.
While nickel prices had been expected to bottom out and rebound, industry observers said this is unlikely to affect stainless buying patterns until higher prices are sustained.....
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