Stainless Steel Me

Having falling from the dramatic highs of 2008 when clearing $33,000 per tonne to the lows this year below $9000 per tonne it seem its now bottomed out. During difficult economic times that have caused big reductions in stainless steel production and resulted in falling Nickel demand the prices seems to be stronger. This is despite recent highs in Nickel stocks of 107,000 tonnes that have failed to dampen the price further. Deutsche Bank is suggesting stainless demand will continue to grow by 7.2% per annum led by China with a 20% growth into 2010. But the same report is suggesting growth in North America and Europe will be 2.8 to 4.0% which we cannot see this year so we take that global projection with caution. However the wider market does appear to feel that supply and demand is coming closer into balance in spite of the gradually rising inventory levels. If they are correct then we could see nickel prices firming later in the year or early next year. We cannot see a supply side crisis that would justify a dramatic price rise but for consumers able to predict forward demand the second quarter may not be a bad time to be covering a percentage of forward requirements for 2009-10. All this points to a stronger quarter two for Nickel and at least holdings its own away from the bottoms of early 2009 before a  strong recovery in 2010 when stainless demands regains its strength.