NEW YORK Shipments by
stainless steel distributors fell in April after three
consecutive month-on-month increases, according to Metals
Service Center Institute (MSCI) data.
Shipments of all stainless
shapes totaled 144,200 tons last month, down 8 percent from
156,700 tons in March and marginally lower than 144,700 tons in
April last year, putting the year-to-date total at 607,300
tons, 2.1 percent lower than 620,100 tons in the first four
months of 2011.
"Demand sucks; there is none,"
one southern service center manager said, adding that a
restocking drive by his customers that started earlier this
year had ended recently.
A market source agreed. "They
(customers) feel they have enough, and if they dont, they
feel they can scramble and get it cheaper later" due to falling
nickel prices, he said.
Last month, distributors
lamented that demand was starting to drop (AMM, April
Inventories held by stainless
steel distributors totaled 388,400 tons (2.7 months
supply at current shipping rates) at the end of April vs.
391,600 tons (2.5 months supply) a month earlier and
440,900 tons (3.0 months supply) in April last year.
Falling nickel prices on the
London Metal Exchange, the largest component of stainless steel
surcharges, are said to be part of the reason for the decline
in demand as buyers wait for the bottom in pricing.
"The continuing decline of
nickel has people skittish," the market source said.
The cash nickel contract on the
LME has averaged $17,412 per tonne ($7.90 per pound) during the
first 17 days of the surcharge period for June, down 3.2
percent from the previous surcharge period, making it likely
that surcharges will fall for the third month in a row.
There are some bright spots in
the market, however. A Midwest service center executive noted a
significant uptick in sales to the automotive market so far
this year. "Were seeing much better demand, mainly from
existing customers," he said.
The market source echoed the
sentiment. "The appliance sector is still weak due to low
housing starts, while anything linked to automotive is doing
well," he said.