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Stainless resists gloom

November 20, 2009 - 00:00 GMT

Production in most parts of the world is rising in response to restocking, and it may signal the bottom of the market, but is it the prelude to a recovery in real demand, asks Sandra Buchanan.

By all accounts, real stainless demand is not really showing any signs of recovery, but restocking from the low levels brought about by panic selling when the nickel price plunged last year has pushed mills into higher production. The bottom of any market is not easy to detect. Reading the end-user markets is not an exact science either: “It’s a mixed bag,” says Markus Moll of Steel & Metals Market Research (SMR) in Austria. “For automotive the trough – from a global perspective – is behind, construction is at the bottom now, and for process equipment, including power generation, the worst is still to come; there’s worse to come for shipbuilding too.” Nevertheless, he interprets the overall situation as being at the bottom: “We are there now, but this doesn’t mean that the recovery is starting.” The upside for producers caused by restocking is clear: average mill capacity use has...

All material subject to strictly enforced copyright laws. © Euromoney Institutional Investor PLC.

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