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BIR CONVENTION: Mostly Sunny for Stainless

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The stainless steel forecast is sunny following a storm cloud in 2007.

June 3, 2008

After experiencing a volatile 2007, the stainless steel industry is likely to enjoy a less turbulent 2008, according to industry analyst Markus Moll of SMR in Austria.


Giving a presentation at the Bureau of International Recycling (BIR) Stainless Steel & Special Alloys session entitled “Mostly Sunny with Local Showers,” Moll remarked that the 2007 inventory de-stocking that caused the turbulence last year is now over.


2008 should be a year of growth for most producers of stainless steel, according to Moll, who also projects steady growth in stainless steel production through 2012. Producers in the United States are in a good position to export right now because of the weak dollar and “investments in efficient mill technology,” he commented


The high cost of nickel has caused considerable exploration and some shifting to 200 series and 400 series products and away from 300 series grades. But Moll remarked that this trend may have peaked. “The cost advantages of 201 or 430 production are decreasing as chromium prices increase,” he said, predicting a “renaissance” for 304 stainless.


He noted that different participants in the supply chain, ranging from steel service centers to scrap yards to melt shops, have also discovered hidden costs in trying to adopt new processes or find additional storage space for 200 and 400 series metals and feedstocks for such metals.


Moll remarked that despite some local showers (such as less than stellar economies in the United States and Japan), the outlook for stainless steel is mostly sunny for the rest of 2008.


In regional reports, Michael Wright of the ELG Metals office in Sheffield, United Kingdom, referred to the first five months of 2008 as stable, building on the fourth quarter of 2007 when the market recovered from its mid-year collapse.


Barry Hunter of Hunter Metals in the United States said logistics and shipping problems are on the minds of American recyclers, as containers remain difficult to procure. There has subsequently been less stainless scrap buying from Asian mills, even in the Western U.S. where stainless scrap typically flows to Taiwan and China.


Ahmad Al Sharif of the Amman, Jordan, office of Sharif Metals, remarked that the active petroleum industry in the Middle East as well as a booming construction market are helping to generate considerable amounts of nickel-chrome tube scrap and other forms of scrap.


Scrap is still being generated in Russia, according to Ildar Neverov of Scrap Market Ltd., but less is being exported. He remarked that some 320,000 tons of stainless scrap was exported from Russia in 2005, but only 200,000 tons in 2007 in a trend toward less exporting that is likely to continue.


A report submitted by Stuart Freilich of Universal Metal Corp. of the United States noted that production snags for both the Airbus A380 and Boeing 787 have caused a noticeable decline in demand for titanium and titanium scrap. “Demand will probably not strengthen until late 2009 or even 2010,” commented Barry Hunter, who read Freilich’s report.


The BIR 2008 World Recycling Convention & Exhibition is taking place in early June in Monte Carlo.


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