Specialty steel producers have been expecting buyers to re-enter the market for stainless steels in early 2008, but buying continues on an as-needed basis. The stainless-using manufacturing sector has been contracting so there have been lighter shipments of stainless steel lately in the U.S., Europe and Asia. Atop that, nickel prices increased by more than 60% in 2007 from 2006, boosting stainless steel transaction prices by better than 40%, which has kept many North American buyers from making any commitments, fearing they will be stuck with overpriced stainless steel in a recession.
"The stainless steel market has been very weak for some time," writes Michael Gambardella at J.P. Morgan Securities in New York. "Buyers have held off purchasing as they wait for falling nickel prices to result in lower stainless prices." That hasn't happened, though, since nickel prices may have slipped by almost 50% since last May but monthly stainless prices aren't quite 25% lower.
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