December 02, 2008

Price hike for SS flat in US fail to stick - Report

Puchasing.com reported that North American stainless sheet buyers appear to have forced producers to withdraw a 5% base price hike. Buyers said that purchases have been so soft that buyers are holding back on orders rather than accept higher prices.

Mr Mark Parr analyst at KeyBanc Capital Markets said that "True demand for stainless steel remains subdued. At this point, the market appears to be struggling to absorb a 5% in April 2008 base price increase on commodity grades."

Mr Parr said that inventory de stocking at the service center link of the supply chain ended late last year and stockpiles are below normal, but in line with current demand levels. He added that "So, a near term return to normalized profitability levels for domestic commodity stainless steel and select specialty metals players appears elusive given the current end market environment."

Stainless steel purchasing in the US dropped by 14% in 2007 despite strength in aerospace and energy end markets. So far in 2008, YoY buys are more than 20% lower than in 2007.