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Valbruna Stainless outlook positive

Keywords: Tags  stainless, Valbruna Stainless, Valbruna Slater Steel, Valbruna Group, Peggy Sikora, Frank Haflich

LONG BEACH, Calif. — Strong demand in key consuming industries is helping to buoy U.S. sales of stainless steel long products this year as a firming nickel price also has brought stability to stainless price tags, according to an executive of Valbruna Stainless Inc.

Peggy Sikora, general manager of U.S. sales for the Fort Wayne, Ind.-based unit of Italy’s Valbruna Group, said the company had predicted that demand would rise 6 percent in 2014. "We are currently at that number and hope it’s sustained through the balance of the year," she told AMM in an interview following a meeting of the Association of Women in the Metal Industries (AWMI).

Aerospace, medical, automotive and oil and gas markets are all showing strength this year, while power generation remains one the few sectors still lagging, Sikora said.

Bruce Hobson, manager of Valbruna Stainless’ Chino, Calif., branch, earlier told the AWMI that stainless demand related to the volatile semiconductor manufacturing sector is "going through the roof right now," driven by growing demand for smartphones.

Although prices for stainless bars and other long products are up an estimated 1 to 2 percent this year, Sikora said it’s "too soon" to forecast the rest of the year since the key nickel price component only began to improve in late January. "This has almost reset the market," she said, citing nickel’s heavy influence on the stainless surcharge. "Keeping that nickel (price) consistent helps keep stainless pricing stable."

The London Metal Exchange’s three-month nickel contract closed the official session March 7 last year at $16,580 per tonne, but by Nov. 27 it had fallen to $13,480 per tonne. However, it started to move up in January after Indonesia implemented a ban on ore exports, and ended the official session March 7 at $15,340.

Valbruna Stainless’ products include the output of the parent company’s Valbruna Slater Steel Corp. bar plant in Fort Wayne and its Italian stainless mills. The company, which doesn’t disclose its production figures, also has seven master distribution locations throughout the United States.

Unlike some U.S. distributors—in particular large, publicly traded chains—privately held Valbruna maintains it isn’t obsessed with keeping a lid on the number of inventory turns. "Inventory is what we consider one of our strengths," Sikora said. "We believe that if we have inventory on the floor we’ll eventually sell it. And our owners believe in inventory."

Global stainless production totals around 35.4 million tonnes per year, with about 70 percent flat rolled and 30 percent long products, Hobson told the AWMI.

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