The stainless steel market has a great performance in spite of high nickel price in 2006. Some analysts said the North American stainless steel is expected to remain good and continuing into the beginning of 2007. North American mills are expecting they will push through base price increases in January 2007. However, the other rivals are imports also 300 series materials into this region. It will become difficult to move the price level forwards. But generally, the industry observes are optimistic that market condition will remain very positive.
The manufacturing industries in North American are presently facing widespread increases in the price of all stainless steel materials. The volatility of the market has negatively influenced business transactions. Today, stainless steel suppliers will generally guarantee a price for only 5 days and in some case for even shorter.
North American price of 300 series have also increased as the alloy surcharge increase in December 2006. For the year as whole, US consumption of average of stainless steel sheet and strip in 2006 up around 11 percent compared to 2005 period. US Mills believe that the stainless steel market demand is looking good for market such as automotive & housing, aerospace as well as building and infrastructure including chemical processing, oil & gas and electrical energy. Strong energy-related markets have also been used a lot of stainless steel for both the oil and natural gas including Liquefied natural gas and ethanol plants.
Although, we seen the price of stainless steel remain strong for most time and the customers realize that if they wait they will likely have to pay a higher price, so it is better to buy sooner. Customers just have to estimate and evaluate what is better solution and conditions for them especially stainless steel market.
Some US mills are staring to look at substitution of 300 series with alternative Grades in the North American market. Such as 201 as 430 are potential materials with less expensive than 300 series for substitution in this stainless steel market. However, most customers are more conservative for trying new stuff in North American. They will tend to be very concerned about the product about product liability. They want to run tests, especially corrosion test form it first.
For the capacity there is some new domestic stainless capacity expected to come in this market. North American stainless has been produced No.4 which will raise capacity from 800,000 tpy to 1 million in 2007. However, the end of 2006 we realize that base prices remain firm, interest rates are high which is not good for project such as building and construction market. And there is question for others countries such European and China.
Indeed, 2006 has been a great year and 2007 should be another good year. Of course it depends on what happens with nickel prices.
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