The global stainless steel scene is changing rapidly. Customer backlash against the rising cost of nickel has been taken on board by the producers. Mills are now taking seriously market demand for low or non nickel grades.
Posco has launched a nickel free stainless steel into its portfolio. This follows similar actions earlier by Japanese producers. Outokumpu, which has traditionally been mainly a supplier of austenitic grades, is to increase its production of ferritic types. This has involved a significant investment in new equipment. Output of ferritic grades is also to be expanded from the new melting shop at Lianzhong, in China.
Global supplies of 300 series material have in the past formed 75 percent of total stainless deliveries. It is interesting to note that Thyssen Krupp recently announced that it may lift output of nickel free steel from the existing figure of 30 percent up to 35 percent. We have reports that an Arcelor Mittal senior executive sees the potential to push up production of non nickel grades to 70 percent in the long term.
The growth in nickel demand in the future is likely to be slower than the overall expansion of the stainless steel sector. This is even more probable now that the producers are investing in new facilities to manufacture ferritic specifications. This fresh capacity will be actively promoted by the mills which was not the case in the past.
This situation proves the point that clever speculation on the LME can only work for a limited period. Any commodity can be priced to unacceptable levels but eventually market fundamentals will prevail. When the price of a product becomes excessive, buyers will seek out substitute materials or in this case grades. 31.05.2007
Source: MEPS - Stainless Steel Review - click here for a free sample copy
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