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Distributors wary of bullish stainless outlook

Keywords: Tags  stainless steel, service centers, distributors, Metals Service Center Institute, MSCI, Rey Mashayekhi

NEW YORK — Stainless steel service centers and distributors agree that Metals Service Center Institute (MSCI) figures for 2013 indicate the market has improved from 2012, but remain wary of such figures suggesting further improvement in 2014, industry sources told AMM.

Stainless shipments totaled 124,400 tons in December, according to the latest MSCI data, up 10 percent from 113,000 tons a year earlier, signaling a stainless market that has benefited from better demand and a more positive economic climate, although 2013 shipments of nearly 1.77 million tones were up only 0.7 percent from 2012 (, Jan. 17).

Service center and distributor sources noted that while the overall market for stainless steel has improved, any gains had been made from a "very poor" 2012, with little evidence suggesting reasons for a further improved market going forward.

"Demand is constant. It’s not bad, but it hasn’t increased. Everything’s been relatively constant the past six months," one West Coast service center source said. "For us, in terms of tons shipped and earned revenue, 2013 was slightly up (in tons shipped) and revenue was down slightly. It’s now more competitive. Margins have been lower because everyone’s fighting for market share."

"We saw the same increase in our numbers, pretty close to that," one East Coast service center source said, citing political uncertainty in an election year as cause for 2012’s slump. "I guess the economy’s starting to turn around, finally."

"Last year was really poor," one Midwest service center source said when asked about the 10-percent year-on-year increase in December shipments. "I only know one or two service centers that are doing really well on their contract business. Most of the others are struggling." He said that demand picked up in January, "but prices are still quite low. You’re selling base gauges at very low or no profit."

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