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SXR600on May 14, 2008 1:24pm
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Surge in stainless steel orders
Surge in stainless steel ordersThyssenKrupp reports surge in stainless steel orders, driven by Europe
Metals Insider - 2008-05-14
Germansteel giant ThyssenKrupp said its stainless steel division saw orderssurge by 40% year-on-year to around 1.1 million tonnes in Q4 07/Q1 08(the first half of the company’s reporting year).
Theprior year period (Q4 06/Q1 07) was characterized by a reluctance tobuy due to then ultra-high nickel prices, high inventories atdistributors and high imports.
Slumping order-flow in theyear-earlier period translated into a period of very low stainlessdemand in Q3 07 with producers cutting back production sharply.
Demandin Europe is now recovering from that vicious de-stocking cycle,according to ThyssenKrupp. “Following a phase of very weak orders anddeliveries in the summer months of 2007, order intake has improvedsignificantly since the 4th calendar quarter 2007. As a result,deliveries by European producers have also risen recently, and in the1st quarter 2008 once again reached the high prior-year level,” itsaid.
“Stock-holding distributors in particular madeincreasing purchases to replenish their heavily depleted stocks. Thenickel price, which has stabilized at a relatively high level, alsoencouraged longer-term ordering,” it added.
However, Europeseems to be the strongest region for stainless. “Demand for stainlesssteel in the NAFTA region was subdued, and base prices decreasedcontinuously” in the Q4 07/Q1 08 period, according to ThyssenKrupp.
“InChina and the other Asian markets, end customers also adopted await-and-see approach. As a result, stock levels in the region remainat a high level. Although some Chinese producers attempted to improvemarket demand and the conditions for price increases by temporarilycutting back production, order intake remained subdued,” it added.
Acrossthe group as a whole deliveries of stainless hot rolled and nickelalloys declined year-on-year in the six-month period, while those ofcold-rolled stainless were level with year-earlier volumes.