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stainless steel & nickel/article

  1. 3,794 Posts.
    Stainless Steel Price Forecast 2005 - 2004 prices could best be defined with any four letter expletive you care to express! Every ingredient used to make stainless steel rose in 2004. And as 2005 begins, there aren't many reasons to believe that will change anytime soon. Mineral stockpiles remain low, and while every mine in the world is scrambling to produce as much nickel and molybdenum as they possibly can to take advantage of the higher prices, there isn't a whole lot more that the current mines can produce. While the world nickel deficit is seen to end by the latter half of 2005, the first half could get dicey. Two things will happen in May that will cause an interesting market. The world's largest producer of nickel is Norilsk Nickel in Russia typically can not ship as the Yenisei River floods. This year, number two producer Inco has announced it will shut down its Copper Cliff smelter down the same month for repairs. Typically mines shut down for repairs during the slow period of July or August so the timing of this action has raised eyebrows. Few other things to watch this year. The CAW has a union contract set to expire in 2005 at Falconbridge's Timmins, Ontario mine. Falconbridge also has a union contract expiring with the USW at the Raglan mine and Inco has a union contract expiring at their Thompson, Manitoba mine. Any of these go sour and we could see price hikes. Another factor in 2004 was the US dollar devaluation. While the Bush administration says it doesn't support the lower dollar value, they have done very little to stop it and many US economists believe they shouldn't. This has helped make US exports cheaper to overseas buyers, while making imports more expensive to US buyers. And, while there were numerous reasons for price increases worldwide, one primary reason gets much of the attention, and blame.

    China. A country that just 20 years ago was basically a non factor in world economics, is now becoming a major factor in the world economy, and will become "the" major factor if the present trend continues. While the US government has spent the last few years telling the rest of the world how it expects them to act, the Chinese over the same period, have entered the market with a wad of cash and a "we won't tell you how to run your country, don't tell us how to run ours" attitude that is giving them serious legitimacy in the world economic market. Economists seem to agree that China's economic growth will slow from 9.3% in 2004 to 8% in 2005, but this will have a minimal affect on metals prices.

    Prediction - Stainless steel prices in the 18-8, 304 range have leveled off, which should hold basically steady for awhile. No substantial decrease potential is foreseen at this time. 316 stainless pricing has yet too peak, although molybdenum prices are not expected to maintain their current $34.50/lb for long. Nickel will stay in the $6 to $7/lb range for the first half of 2005, and possibly retract to the $5 to $6/lb range by the latter half of the year. If this prediction proves correct, then we will not see any substantial lowering in stainless steel prices until late 2005/ or early 2006.

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