Dr Chris Pointon
The sixth annual conference of the International Stainless Steel Forum, ISSF-6, took place this year at Sun City. More than 75 representatives of senior management of the world’s stainless industry assembled to hear experts from South Africa, Europe and Japan discuss stainless’s contribution to the economy of South Africa, and the growing use of stainless in high-strength applications.
This year’s conference also had three invited guests from China, representing the largest individual market for stainless in 2001. During the conference, speakers and delegates expressed optimism with respect to recent growth figures for stainless. Over the last decade, the industry has experienced a healthy and continuous growth of 5% to 7%.
While it did experience a small downturn in 2001, real end-use demand and ongoing positive substitution of other materials will bring the industry back to normal growth later this year. This will mean that for the core product, namely cold-rolled flat production, a benchmark of ten-million metric tons will be reached for the first time.
The ongoing process of consolidation and globalisation, including recent examples like the merger of Avesta Sheffield and Outokumpu to form AvestaPolarit, the majority stake acquired by Spanish stainless producer, Acerinox, in Columbus Stainless, and the Usinor/Arbed/Aceralis merger, will all serve to strengthen the position of the industry as a whole, and provide a balanced global supply-and-demand situation.
Difficult times
Dr Chris Pointon, president of stainless materials at BHP Billiton, commented that the fortunes of the stainless, nickel, chrome and recycling industries are closely linked, but do not follow an identical path. “The past five years have seen difficult times for the nickel and chrome industries, and this has been reflected in the recent history of metal prices.
“The chrome industry has low barriers to entry, but there are signs that the recent cyclical oversupply is being addressed. A price recovery is likely; forecast demand growth is high, but margins will remain under pressure. Nickel has suffered from low returns and under-investment, with the consequence that the medium-term outlook is one of supply deficit.”
Dr Pointon said the challenge is to convince investors that investing in new nickel projects will deliver their cost of capital, but to guard against another period of over-production. “Raw material suppliers and their stainless customers face common threats related to perceive environmental and health aspects of metal production and use.” The European Union is the main driving force in creating a new and far-reaching regulatory framework. A key issue for the stainless industry and its suppliers is to engage the regulators proactively, which requires taking responsibility for the provision of reliable scientific data for proper risk assessment.
“We have a first-class suite of materials and products with exceptional properties in use,” said Dr Pointon. “Stainless and NiCr alloys can, and do, make a unique contribution to sustainable development. BHP Billiton’s production process and controls ensure that any user of our raw materials can be assured of independently-audited conformance to the practice and principle of sustainable development through the value chain.”
A year ago in Rio de Janeiro, ISSF-5 approved a new strategy for the organisation. In the economics and statistics area, a capacity database is being built to illustrate the medium-to-long term supply balance, as well as to provide information concerning real end-use demand of stainless versus actual supply chain stock levels.
Dr Staffan Malm, secretary general of the ISSF, said the organisation would “paint and deliver pictures illustrating the current situation within the industry. In the same way that a radio station issues traffic news, so will the new facility provide members with information to help them make their own decisions.”
New Web site
The market development committee focused upon expanding communications activities with the introduction of a new Web site, www.worldstainless.org, containing a library facility covering a wide range of new and different stainless applications, a Web-based specialist stainless training course, and a CD-Rom computer-aided learning module for architecture students. The site also contains a simple ‘Stainless in the Home’ animation facility that outlines the advantages of the product in the kitchen.
“The new strategy for ISSF aims to deliver global facts for local use, and to encourage members to apply these facts and figures locally. Through these programmes and activities, ISSF aims to encourage end users to specify stainless for their projects and businesses, thereby supporting market growth,” concluded Dr Malm.
