Stainless steel producers brace for lean patch in first half of 2009

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Oct 2008

Stainless steel consumption in the UAE is expected to go through a downturn period in the first half of 2009, in light of the global financial crunch, industry experts say. "There is an impact on this sector and the sectors that utilise stainless steel. We think that we will have a downturn in consumption in the first six months of 2009. It depends on the volatility of raw materials "Dubai is a very important area for stainless steel. It is at a geographic point between Asia and Europe," Luigi Agarani, managing director of Tad said.
Stainless steel consumption in the UAE stood at 58,000 tonnes in 2007, Agarani said. Other Middle East countries have a consumption of about 20,000 to 25,000 tonnes. Global consumption of stainless steel was 15.4 million tonnes.
Andrea Gatti, executive vice president of sales and marketing at Outokumpu, agreed that challenges lay ahead for the industry.
Drop in prices
"The stainless steel industry has many challenges, with raw material prices increasing, and nickel more volatile than usual. Stainless steel prices overall are creating a bit of a headache for many customers," Gatti said.
Steel prices, including stainless steel, have dropped dramatically in recent weeks, due, in part, to nickel prices.
"Nickel was below 9,000 [dollar per metric tonne] a few days ago and I just heard now it's about 13,700," Gatti added.
Gatti however seemed sure the industry would be able to cope with the crisis. "We're riding a winning horse," he said.
Last year, nickel was trading for around $33,000 per metric tonne.
The biggest threat facing the stainless steel industry aside from the current financial crisis, is the growing capacity of China and the high and volatile prices of raw materials.
The non-corrosive properties of stainless steel are making it more popular for bayside developments.

Source: Gulf News