09 April 2014
Late last year, MEPS predicted that there would be an upturn in demand for stainless steel, however this has not yet materialized during the first quarter of 2014. However, recent increases in nickel costs have lifted stainless transaction values and helped boost stainless purchases.
The mineral ore export ban imposed by Indonesia has had a small effect since the beginning of 2014, but other conventional nickel producers have stepped up their outputs in an effort to help reduce the shortfall. Nickel continues to be in surplus relative to current demand. The LME Nickel Cash price rose by US$2000 per ton between Feb. 25 and Mar. 26, which was an increase of over 14 percent. As a result, austenitic stainless steel transaction values have advanced and likely to continue doing so. Market insiders are reporting positive signs saying that consumption is sure to increase (either because of seasonal trends or because of genuine economic recovery).
Steel production still weak in mid April.
….the only explanation still standing is the shift in the composition of activity away from capital-intensive forms of production, like manufacturing, to less capital-intensive activities, like services.
If the disorder has multiple causes, then there should be multiple treatments. There should be tax incentives for firms to hire the long-term unemployed; more public spending on infrastructure, education, and research to compensate for the shortfall in private capital spending; and still higher capital requirements for banks and strengthened regulation of nonbank financial institutions to prevent them from excessive risk-taking.
Friday, April 11, 2014
For the week ending April 5, U.S. railroads registered 296,039 carloads, up 5.4 percent, and 261,084 intermodal loads, up 12.6 percent compared with volumes from the same week last year, according to the Association of American Railroads.
Total combined traffic climbed 8.7 percent to 557,123 units and nine of 10 carload commodity groups posted gains, led by grain at 16.8 percent and petroleum/petroleum products at 11 percent. Only forest products traffic registered a decline, and a small one at that: 0.7 percent.
Last week steel production fell sharply.
Steel production has fallen sharply the past two weeks. It is not clear if this is due to a downturn in demand or is a temporary disruption.
MAPI forecasts manufacturing production growth of 3.2% in 2014, up from the 2.3% rate in 2013. And production growth will continue in 2015, predicts MAPI, to reach 4.0%, down slightly from the organization’s December 2013 forecast of 4.1%.
“Factors that were dragging down growth (mainly tax and other policy issues) were absorbed in 2013 and will not worsen over the next two years,” says MAPI Chief Economist Daniel J. Meckstroth, Ph.D. “Consumer-driven manufacturing growth will be relatively stable and supported by employment gains. Households have low debt burdens and their wealth is rising because of higher stock and home prices.
“Business investment–driven manufacturing is responsible for nearly all of the acceleration in production growth,” Meckstroth notes. “Firms have lots of cash, are profitable, and have relatively high utilization rates. Importantly, the two-year federal budget and debt ceiling agreement substantially reduce uncertainty. Now that the Eurozone has come out of recession and emerging markets seem more resilient, export activity should pick up and provide a boost to business sentiment.”
The rate of increase in global steel production will marginally outstrip world economic growth over the next four years, according to a new report by steel analysts MEPS (International) Ltd.