Meps are reporting that the price of Nickel is casing buyers to seek alternatives
High nickel prices are prompting buyers of austenitic stainless steels to actively seek alternative grades or other materials. The benefits of life cycle costing are diminishing. However, much of the substitution is taking place within the stainless industry but coated carbon steels are under consideration.
The ferritic steel (type 430) is becoming much more popular. Lower nickel, 200 series, products are also taking off. Mills around the world are now heavily promoting these as alternatives to the austenitic grades.
Specifiers are no longer slavishly following past practices. Up to 2001, spikes in nickel on the LME were quite short lived - with average annual prices increasing for two years before slipping back again. This was insufficient time for the specifiers to undertake tests and change manufacturing procedures, etc.
Since 2001, we have noted five consecutive annual rises in nickel. We predict 2007 will be the sixth. Average nickel prices this year will show a sevenfold rise over the past six years. The stainless industry has reached a watershed. Strong growth is assured but will be mainly through the promotion of the 200 and 400 series grades if nickel stays at recent elevated levels.
When users modify production methods and materials they do not readily return to past practices. Costs are too high. This has kept the austenitic grades in such a strong position in recent years. Nickel producers and speculators may not kill but could certainly lame the goose that layed the golden egg.