What is the current direction of the stainless steel market?

The stainless steel market is still strong in every part of the world. Although there are reports indicating that inventories have increased in the US, stainless steel inventories are fairly low and raw material prices are still high in Europe and the Far East. Sometimes, even sharp increases have been observed. Stainless steel prices increased in early September due to rising nickel prices and especially due to nickel extras' reaching Euro 2.27/kg level. Moreover, further increases are expected at the beginning of October. Regarding the extent to which these inventories will keep their levels and the approximate date when the increase in stainless consumption will come to an end, we may say that stainless steel consumption is increasing day by day, at least in Europe and the Far East, and that these increases will continue till 2010. As long as there is no global crisis, the existence of growing economies all over the world indicates that stainless steel requirements will increase continuously. In fact, an increase in demand has already been observed and major stainless and raw material producers continue making new investments. Although it is thought that the recent investment by ThyssenKrupp in the US will create a situation of oversupply in the US stainless steel market, it should be noted that many small-scale firms have already been closed and that these firms have already been replaced by major global producers. Otherwise, the only small-scale firms to maintain their presence are those which have chosen to merge with global firms. Although Turkish mills are following the price increases in Europe one month behind, they are continuously facing price increases. With the rebound following the holiday period, sales of major firms have increased, while those of small-scale firms have yet to show movement. Currently, we can say for certain that the rebound in the manufacturing industry is having an effect on stainless steel sales. Following the price increases in early September, local prices in the Turkish market are at $3,800/ton for Acerinox production 304 series stainless steel coil of 2 mm thickness, at Euro 3,500/ton for Arcelor production 304 series stainless steel coil of 2 mm thickness and at Euro 3,450-3,500/ton for Outokumpu production 304 series stainless steel coil of 2 mm thickness. There is currently a power war of sorts in the Turkish stainless steel pipe market. Mills producing in Turkey as well as trading firms importing pipe from Europe are competing against traders involved in importing pipes from the Far East and who are selling products at much lower prices. Reports from the market say that Turkish mills may file antidumping cases. In interviews with major players in the market, it was indicated that the major problem of the Turkish stainless steel industry is that consumers are making blind sales and are not being cautious enough about the quality of the products they purchase. Due to the new nickel extras, price increases are expected in the pipe market in October. According to reports from China, prices in the country are firm. However, as is well known by now, China has decreased its export tax rebate by 3 percentage points to 8 percent. This new regulation is aimed at eliminating excess production for export in this country, at , establishing efficient mills to replace inefficient ones, and at increasing the number of mills which supply both the local and foreign markets with the qualified products. The stainless steel industry in China is among the industries expected to indicate the highest growth. Every day, there is a new investment report coming from China. Everybody is curious about what kind of effect this growth will have on raw material requirements. Currently, the general expectation is that stainless steel prices will increase till the end of the year. However, whether investments made in raw materials will meet requirements is an important issue. It should be noted that these investments and prices increases have resulted in a backlash by end-users who have rebelled against the higher prices and have started to look for other alternatives. This protest reaction on the part of the end-users will bring some kind of slowdown to the stainless steel market next year. However, a question remains as to the extent of the prospective slowdown.