STEEL USERS NOW SERIOUSLY LOOKING FOR SUBSTITUTE MATERIALS
Nickel prices have retreated
somewhat from the record high they reached earlier this month.
Although the price drew back from crossing the $US30,000 per tonne
mark, it remains at over $US27,000 (cash buyer price) at the time of
writing. Such elevated prices are causing increasing concern to
stainless producers and their customers.
As a result of nickelís price surge,
stainless mills have already announced increased alloy surcharges
for August sales. In Europe and North America, surcharges for type
304 flat products have almost doubled since January, and they seem
certain to rise again in September. Along with hikes in basis
figures, this has propelled transaction values for many
nickel-bearing grades to record highs.
Therefore it is not surprising that users
of austenitic grades are casting around for alternatives and
examining whether they could cut costs by switching to other
materials. Stainless producers say they have not witnessed much
substitution so far. This is partly because the price of many
replacement materials has also gone up significantly.
Among stainless steelís rivals, copper
prices have risen by almost 60 percent so far this year and also
stand at record high levels. Galvanized steel sheet prices are
currently about 40 percent above those of January, largely because
of a 52 percent increase in the price of zinc.
Perhaps the most attractive alternative to
stainless is aluminium, where the London Metal Exchange price in
late July was a mere 3 percent up on its January figure.
They may be playing it down, but it is
clear that some mills are concerned about long-term loss of market
share. Stainless producers themselves are offering their customers a
range of alternatives in an effort to prevent business being lost to
non-ferrous or carbon steel materials. Such options include
lower-nickel duplex grades and ferritic types. In the meantime,
nickelís fluctuations will continue to create problems for the
stainless industry worldwide.
Source: MEPS - Stainless
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