Average Nickel Content Declining in Stainless Steels
05/02/2007 - MEPS reports that high nickel prices are prompting buyers of austenitic stainless steels to actively seek alternative grades or other materials, a trend that could have long-term implications.
MEPS reports that high nickel prices are prompting buyers of austenitic stainless steels to actively seek alternative grades or other materials, as the benefits of life cycle costing continue to diminish. Although much of the substitution is taking place within the stainless industry, coated carbon steels are also under consideration.
According to MEPS, ferritic steel (type 430) is becoming much more popular, and lower-nickel 200 series products are also gaining in popularity. Mills around the world are now heavily promoting these as alternatives to the austenitic grades.
Buyers and product specifiers are no longer slavishly following past practices, says MEPS. Previously (up to 2001), nickel spikes on the LME were quite short lived, with average annual prices increasing for two years before slipping back again. This was insufficient time for the specifiers to test and evaluate substitutions, change manufacturing procedures, etc.
MEPS has noted five consecutive annual rises in nickel since 2001, and is predicting that 2007 will be the sixth. MEPS says that average nickel prices will show a sevenfold rise this year over the past six years. Believing that the stainless industry has reached a watershed, MEPS says that strong growth is assured but that it will occur mainly through the promotion of the 200 and 400 series grades, provided that nickel stays at recent elevated levels.
Because users have modified production methods and materials, MEPS says they will not readily return to past practices, as the costs are too high. Although this phenomenon has kept austenitic grades in a strong position in recent years, continued high nickel prices could threaten to topple this equilibrium.
Source: MEPS Stainless Steel Review
