Stainless Steel/A touch of tarnish as better sentiment fades

摘要

The brighter picture we painted for stainless steel in our last issue is already looking a little tarnished. While the first quarter of the year saw world production of stainless still down on the year before, a modest recovery was clearly under way. Taking flat rolled output as a benchmark, a year-on-year decline of 5.2 percent in January was followed by a rise of 5-6 percent in February and March, and the second quarter was set for overall growth to be restored. This is now less certain. Recent weeks have seen sentiment steady in the US, but turn more cautious in most Asian markets and weaken in Europe. While there have been one or two exceptions, the result has generally been a curbing of price ambitions in the US and most Asian markets and only modest increases in Europe. March saw mild optimism prevail in the latter as dealers restocked, order books strengthened and prices firmed. Since then there has been a mild but distinct change of climate. Though they are still some way short of the peaks reached in the last boom, production levels are relatively high but the scope for further increases looks limited. The upturn in business early in the year looks increasingly to have been a one-off episode linked to restocking, and lead times on order books have dropped back to reflect higher production and flatter demand. Producers have not been able to achieve their base price targets, having to be content with increases of 30-45 euros/t instead of 50 euros/t on 304 sheet and 5 euros/t or less on 430.