Stainless Steel/Signs of improvement

摘要

During January the stainless steel markets in both the USA and Asia showed signs of improvement with cold rolled shipments increasing in the USA and prices starting to rise in Asia. While end-user demand remained poor in Western Europe, we believe that the market, in terms of real demand, has now reached the bottom in the current cycle. In the USA cold rolled shipments have started to recover from the slump experienced in 2001, but unlike previous recoveries double-digit growth has not occurred. This slow growth is attributed to the hangover from the 1990's investment boom, which has resulted in low capacity utilisation across the manufacturing sector. Indeed, the decision over Iraq is having a significant impact on consumer confidence and further recovery will be determined by the final decision regarding the conflict. However, for the time being, the housing sector continues to perform well and continued cheap pricing deals in the automotive sector have translated in to robust ferritic demand. Although raw material costs have pushed up the alloy surcharge, still weak base prices mean transaction prices have risen only marginally over the last month.