European stainless steel production increased by almost 7 percent last year but will rise by perhaps only 3-5 percent this year, the Stainless Steel & Special Alloys Committee was told by its Chairman Sandro Giuliani of Giuliani Metalli-Cronimet Group of Italy.
Recent months had thrown up ‘risks and uncertainty’ in the form of US dollar weakness, oil price increases, variable demand, and nickel supply/scrap availability issues. “European steelworks have had to face a weakening market situation as well as some erosion in prices since the beginning of 2005,” he said. There had already been signs of a possible slow-down in orders for the mills, he added.
Forward orders for new business were not flowing in the United States, according to reports by Barry Hunter of Hunter BenMet Assoc. “Clear negatives expressed for the European economy, a reduction in U.S. car sales, a non-aggressive Chinese buying market, the potential of a stronger dollar, increasing interest rates, and everything being written about metals, would give support to reduced buying and maintaining extremely tight inventory controls,’ he told delegates.
Hunter went on to note that Asia accounted for around 83 percent of US stainless steel scrap exports in the first quarter of the year, with China taking more than half of this volume.
According to Stuart Freilich of Universal Metal Corp., military requirements for new/upgraded equipment and spare/replacement parts would help underpin demand for high temperature alloys, titanium alloys and refractory metals throughout 2006 and 2007. The market for these materials would also be boosted by increases in passenger movements and freight business.
The scrap titanium market had been ‘spectacular’ since the previous BIR convention last October, with prices virtually tripling in the case of 90-6-4 revert material. “This was all to change in late April,” said Freilich, “when the steelworks did not place bids for their next-quarter ferro titanium requirements. Traders, especially from the Ukraine region, panicked and began selling ferro titanium at below market, causing the market to fall to today’s levels.’ Titanium ingot makers had responded to the price changes in ferro scrap by withdrawing from the market ‘even though the fundamentals for titanium ingot have not changed’, he said.
Ildar Neverov of TeplotovResource revealed in Barcelona that Russian stainless steel scrap collection was expected to total between 270-300,000 metric tons a year by 2010. Russia’s export duty remained at 15 percent but there was still scope to offer material to international customers, he went on to say.