Current and Future Trends in the Supply of Raw Materials for the Stainless Steel Industry

摘要

In the nickel market, annual average prices are forecast to peak at over 5.00 dollars/lb, due to shortages of primary nickel. Due to the long lead times for new nickel capacity, primary supply will remain constrained until 2006 at the earliest. From China's perspective, the country will have a growing net import requirement for primary nickel. Local production is dependent in part on imported feed and is consequently unlikely to expand fast enough to meet domestic demand. In ferrochrome, global production volumes have recently been constrained, industry stocks have been sharply eroded, the Rand has appreciated and ferrochrome prices have rallied to above 45c/lb. Despite the recovery in this market, the industry continues to be vulnerable to over-supply as the lead times for new capacity are short, the capital outlay is modest and the technology is relatively straightforward. In forecasting ferrochrome prices, it should be remembered that trends will depend crucially on movements in exchange rates as well developments in the supply demand balance. As in nickel, China is expected to have a rapidly growing net import requirement for ferrochrome. Finally, in the molybdenum market, the tightness in supply, caused by copper induced cutbacks to production and lower Chinese net exports, is expected to prevail in the short term. Ultimately, however, the tightness will ease, once co- and by- product mines are fully operational again and Chinese net exports start to rise. Prices are forecast to reach a peak in 2004 but then slide back towards their long-term average of 3.00 dollars/lb. China is a major global supplier of molybdenum and, following a slowdown in growth in the short term, should experience a rising trend for its exports in the years beyond 2005.