Slow-down evident in the stainless steel sector
European stainless steel production
increased by almost 7% last year but will rise by perhaps only
3 to 5% in 2005, the Stainless Steel & Special Alloys Committee
was told in May by its chairman Sandro Giuliani of Giuliani Metalli-Cronimet
Group of Italy.
Recent months had thrown up ‘risks
and uncertainty’ in the form of U.S. dollar weakness, oil
price increases, variable demand, and nickel supply/scrap availability
issues. ‘European steelworks have had to face a weakening
market situation as well as some erosion in prices since the beginning
of 2005,’ he said. There had already been signs of a possible
slow-down in orders for the mills, he added.
Forward orders for new business
were not flowing in the U.S., according to reports received by
Barry Hunter of Hunter BenMet Assoc. ‘Clear negatives expressed
for the European economy, a reduction in U.S. car sales, a non-aggressive
Chinese buying market, the potential of a stronger dollar, increasing
interest rates, and everything being written about metals, would
give support to reduced buying and maintaining extremely tight
inventory controls,’ he told delegates. Hunter went on to
note that Asia accounted for around 83% of U.S. stainless steel
scrap exports in the first quarter of 2005, with China taking
more than half of this volume.
According to fellow countryman
Stuart Freilich of Universal Metal Corporation, military requirements
for new/upgraded equipment and spare/replacement parts would help
underpin demand for high temperature alloys, titanium alloys and
refractory metals throughout 2006 and 2007. The market for these
materials would also be boosted by increases in passenger movements
and freight business.
The scrap titanium market had
been ‘spectacular’ since the previous BIR convention
last October, with prices virtually tripling in the case of 90-6-4
revert material. ‘This was all to change in late April,’
said Mr Freilich, ‘when the steelworks did not place bids
for their next-quarter ferro titanium requirements. Traders, especially
from the Ukraine region, panicked and began selling ferro titanium
at below market, causing the market to fall to today’s levels.’
Titanium ingot makers had responded to the price changes in ferro
scrap by withdrawing from the market ‘even though the fundamentals
for titanium ingot have not changed’, he said.
Ildar Neverov of TeplotovResource
revealed in Barcelona that Russian stainless steel scrap collection
was expected to total 270,000-300,000 tons per annum to 2010.
Russia’s export duty remained at 15% but there was still
scope to offer material to international customers, he went on
A profile of major stainless
steel producer Acerinox SA was provided by guest speaker Juan
Garcia, the company’s head of investor and media relations.
He explained that the company had facilities in Spain, the U.S.
and South Africa, and was among the world’s top five stainless
steel flat product producers which together accounted for 58%
of global production in 2004. Garcia also confirmed that Acerinox
was investing in a 200,000 tons per annum electric arc furnace
at the NAS operation in the U.S., thereby increasing its capacity
to around 1 million tons.