Global Fastener News

Roberto At WAFD: Stainless Steel To Decline

Jason Sandefur

Signaling good news for fastener distributors, the price of nickel is expected to decline in the coming months, easing stainless steel margins hounded by nickel’s meteoric rise in recent years, according to a Western Association of Fastener Distributors panel presenting at the National Industrial Fastener Show in Las Vegas.
Tim Roberto of Star Stainless told attendees of “The Rapidly Changing International Marketplace” conference that labor disputes in the nickel industry should be settled in the near future. This development should lead to an influx of nickel on the market, making stainless steel less expensive. Two-thirds of all the nickel mined in the world is used to make stainless steel, Roberto explained.
“The future looks bright right now,” Roberto stated.
Roberto predicted a drop in price of nickel, currently selling at $13.65 per pound, which should begin reducing stainless steel prices by the second or third quarter of 2007. However, Roberto characterized his analysis as “rosy,” noting low inventories could keep demand inflated for some time.
“Things could go wrong really quickly,” he emphasized.
His advice to fastener distributors included linking prices to commodity hikes and selling products based on investment costs, not inventory.
WAFD panelist Bruce Darling of Porteous Fastener Co. reported that steel prices are expected to rise moderately during the next six months, probably at a quarterly pace of 3% to 5%. Spotty steel shortages continue to keep prices high, Darling stated.
Other factors adding to the rising cost of fastener imports include high zinc prices, domestic freight fuel surcharges of 15% to 20%, and conversion to RoHS-compliant Trivalent chrome finishes.
Tim Marzano of N-D Industries, who has spend the last six years setting up Asian operations for his company, claimed that doing business in Asia continues to be profitable. On average a U.S. company makes a 42% return on its Asian operations, Marzona explained.
Deep pockets are required to get businesses operational as the bureaucracy landscape in Asia evolves, Marzano said.
“Doing business in China is kind of like a Rubik’s Cube, only the colors keep changing,” Marzano noted. �2006 FastenerNews.com