156•
PVFMarketReport
Market condition and activity bulletin First Quarter 2011
Pricing:Ô Stainless Steel pricing Stainless Steel Pipe
is forecast to remain relatively flat on most stainless items as base prices are adjusted slightly upwards, but sur- charges will moderate. Lead times:Delivery lead times re-
main at 8 - 12 weeks, with fill rates of 25% - 40%. Non-standard material de- livery is running 6 - 12 weeks. Comments: There are a lot of in-
dicators that suggest that demand is increasing, but it does not at all seem universal. The mills are presenting a solid front with respect to pricing, but most orders are still negotiable. Last quarter pricing was up 3% - 5% fol- lowing the stock market upwards, pushing up base and surcharges. There does not seem to be sufficient backlog at the mills to sustain yet. There seems to be a lot of Chinese stainless pipe in the U.S. right now. We believe it would not take a big change in activity to push the market into a much busier phase. Indicators from many customers suggest things are picking up and a general lack of inventory could push lead times at the mills out in a hurry.
Stainless Steel Weld Fittings, 150 and Hi-Pressure Fittings
Pricing: (Weld Fitting 150#)
(SS Pressure Fittings) Manufacturers forecast a slight 1% - 2-1/2% increase in pricing stainless fittings. Manufac- turers are hoping that butt-weld fittings will go up in this range. They also ex- pect seamless fitting will go up as high as 5%. Nickel prices and surcharges on pipe should filter down to fittings es- pecially seamless. Prices were steady during the fourth quarter. Lead times: Fill rates remain at
primary nickel prices were at $24,960 /MT; 18-8 Scrap prices were at $2,313/MT and Molybdenum was at $37,000/MT. Conversely, at the begin- ning of October, primary nickel prices were at $23,775/MT and 18-8 Scrap was at $2,251/MT and Molybdenum was about $33,500/MT. One manufacturer noted there re-
mains a general uncertainty and lack of confidence in a sustained economic re- covery. In addition, the weak confi- dence level is further exacerbated by nickel’s extreme volatility throughout 2010. The acute price fluctuations of nickel have rendered profits elusive for virtually all major stainless steel mills and PVF producers. Leading mills are diversifying away from nickel based alloys and concentrating on ferritic grades of stainless steels. Nickel based stainless steel used to account for 70% of the total amount of stainless pro- duced globally, and the percentage is now 57% and falling. Alan Lipp of Merit Brass shared
the following: “Large PVF distribu- tors maintain a poignantly under- standable aversion to risk in reaction to the Q4 - 2008 crash and burn of material prices and the resultant trashing of their inventory values. These additional stresses are placing even more pressure on a supply chain still struggling to overcome the ef- fects of the financial crisis. While de- mand has recovered admirably in certain end-use sectors (e.g. chemi- cal, oil and gas, power generation), manufacturers have found this to be an exceptionally difficult year to bal- ance volume and profit targets with service performance and have strug- gled to effectively synthesize finished product prices with changes to nickel
daunting. The tide may be starting to turn though as evidenced by North American Stainless' announced inten- tion to increase base prices of stain- less bar and angle effective with January 3rd shipments.” He went on to comment that while
its fundamentals remain weak in comparison to copper and tin, nickel still has been the second best per- forming base metal (of the six major metals traded on the LME) this year, up nearly 25%. The obvious ongoing questions remains: do fundamentals drive costs / prices of nickel and austenitic stainless steels or are price levels primarily determined by spec- ulative influences? There is no deny- ing the fact that the 2 main issues driving speculators appetites (or lack thereof) for nickel and a large suite of U.S. dollar-based commodities, is de- mand in the emerging economies of the so-call BRIC nations and the level of the dollar.
Brazil, Russia, India And China The BRIC thesis posits that China
and India will become the world’s dominant suppliers of manufactured goods and services, respectively, while Brazil and Russia will become similarly dominant as suppliers of raw materials. It’s important to note that the Goldman Sachs thesis isn’t that these countries are a political al- liance (like the European Union) or a formal trading association, but they have the potential to form a powerful economic bloc. BRIC is now also used as a more generic marketing term to refer to these four emerging economies. Due to lower labor and production costs, many companies also cite BRIC as a source of foreign expansion opportunity.
Stainless Steel Flanges
BY GaRY CaRtRiGht Consultant for Piping and equipment, Inc.
their inventory levels lower. Reuters reports that the outlook for the steel sector is stable, and "the worst should be behind for the industry" as noted by Andrey Nokolaev of the ratings agency S&P on January 11th. VTB Capital analyst Wiktor Bielski said in a comment reported by Bloomberg that the demand for nickel will rise as much as 7% in the first quarter over the prior three months to a record 390,000 tons on steelmaker usage. Nickel is used to protect stainless steel against corrosion. He went on to say that sup- ply will run short of demand by 15,000 and 20,000 tons in the period, and prices may reach $27,500 a ton in the next few weeks.
Carbon Steel Pipe - Seamless, ERW and Continuous Weld
Pricing: Manufacturers com-
ment that pricing is up 5% - 8% with a $200 per ton increase in HRC. The driving factor in the price of carbon steel pipe and tube is the cost of coil. Lead times: Fill rates are running
at 40% - 50% with lead times of 6 - 8 weeks. Increased lead times are being seen on coil for manufacturers. When lead times increase, buyers at the factory are forced to increase pur- chases to keep inventories full for manufacturing. Comments: The U. S. Department
Pipe Surcharges for Stainless based on the published flat rolled surcharges plus a yield adjustment. Information provided by Outokumpu.
80% - 90% or better with lead times of 4 - 6 weeks for commodity material not in stock, as well as specials. Comments: Pipe inventories are
down at the manufacturer’s level and they are dependent upon distributor pipe inventories. Manufacturers say they are hearing more “no China” and some, “no Asian.” For the most part, material prices trended up since the be- ginning of October. As of 12/31/2010,
costs. But the present challenges for austenitic stainless steel producers ex- tend well beyond nickel’s erratic vac- illations. Rising labor costs, rising power costs and shrinking availability (particularly in China), rising costs and tightening of capital, rising export taxes on nickel from Russia and Aus- tralia and oversupply of a host of PVF products makes earning a reasonable return on investments even more
• Be sure to visit
www.thewholesaler.com for web exclusive articles and videos! • Pricing: Manufacturers indi- Ô
cate no change in the pricing of stain- less steel flanges during the first quarter 2011. Lead times: Fill rates are running
20% - 30% with delivery lead times of 4 - 6 weeks for stainless and 6 - 8 weeks for nickel alloys. Specialty items are running 12 - 16 weeks. Comments: Lead times from mills are running longer. Mills are keeping
of Commerce has imposed duties on standard pipe from Turkey that range from the low single digits up to almost 30%. Chinese seamless (1/2" thru 16") now has anti-dumping duties ranging from 49% to 99%, while the CVD (counter veiling duty) is from 14% to 54%. India has had the duties on its standard pipe imports to the U.S. re- vised with some mills penalized by as much as 87%. The MEPS predict in an article by
the Steel Strip that the “World Average Carbon Steel Price is forecast to ex- ceed $1,000 US per ton in the third quarter of 2011, according to a prelim- inary analysis by the company. This figure compares with an annual aver- age in 2010 of $733 US per ton and an ‘all-time’ high in 2008 of $1160 US per ton. This sharp rise in steel prices (Turn to Q1 ... page 158.)
•THE WHOLESALER® — MARCH 2011
Ô
Ô
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177 |
Page 178 |
Page 179 |
Page 180 |
Page 181 |
Page 182 |
Page 183 |
Page 184 |
Page 185 |
Page 186 |
Page 187 |
Page 188 |
Page 189 |
Page 190 |
Page 191 |
Page 192 |
Page 193 |
Page 194 |
Page 195 |
Page 196 |
Page 197 |
Page 198 |
Page 199 |
Page 200