Posted on 04/06/2013 in category Stainless

General overview

2013 seems to be a year of challenges.

After two years of many hopes and disappointments in the stainless steel business, all market participants were wishing for a successful 2013. The signs were favourable: steelworks told us of rising demand for stainless steel and of a strong start to the new year; orders for January were at a very high level and were expected to rise again in February; and stainless steel processors were already ordering larger volumes in December. Everyone expected rising prices and an ultimately successful period.

After two weeks, our dreams were shattered by reality. The nickel price did not rise but instead idled at roughly US$ 17,500 per tonne. (The average price climbed from US$ 17,407 in December to US$ 17,465 in January and then to US$ 17,734 in February.) There appears to be no major increase in sight. And all the other news arising over the period seems to offer no route back to hope.

A worldwide decline in new car sales; reduced order intakes for stainless steel processors; a global slowdown in nickel consumption; soft demand for stainless steel in China; stainless steel production overcapacity coupled with long-term losses at most of the steelworks; and rising supply of nickel from ramped-up exploration projects in New Caledonia, Brazil, Venezuela, Australia and Finland. All these headlines pointed to a weaker market, more competition and lower earnings.

Frank W├Ąckerle
CRONIMET Ferroleg. GmbH

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