Stainless Steel

409 is often considered “the barely stainless steel,” or affectionately the most humble of the stainless steels. Stainless steel must have a minimum of 10.5% chromium to be stainless steel. 409 Contains a minimum of 10.5% chromium, thus the moniker barely stainless steel.

Pool 4 Tool’s Automotive SRM Summit

In addition to minimal chromium content, 409 stainless has three additional properties that make it an attractive product for substitution: it is the lowest cost stainless, it has good oxidation resistance and excellent formability.

Middleweight Corrosion Fighter

According to AK Steel, 409 gets specified where oxidation and corrosion requirements go beyond carbon steel and some coated steels. North American Stainless suggests, “it is not as resistant to corrosion or high-temperature oxidation as the higher-alloyed stainless steels (430 or 304), but it is still far superior to mild steel and low alloy corrosion resisting steels and most coated mild steels.”

And not to ignore the other main US producer of 409, Allegheny Technologies explained its usage in automotive mufflers, “The good fabricability of this alloy, combined with its basic corrosion resistance and economy have significantly broadened the utility of ATI 409HPtm stainless.”

As most MetalMiner readers know, alloy substitutions in stainless steel have typically occurred when an alloying element such as nickel has increased in price. When nickel becomes volatile, manufacturers have sought options with less nickel or no nickel that have sufficient properties to make the final product without compromising quality. Both 304 and 316L are readily available and could be considered the path of least resistance in terms of specifying stainless steel; however, in some cases, these alloys may exceed the necessary properties for the final application.

Most consider 304 or 316L the “old standby” grades, but that thinking contains a few misconceptions. For example, stainless is stainless because it has at least 10.5% chromium (some would say 11% chromium), not because it contains nickel. Stainless can be both magnetic and non-magnetic. In commercial food service equipment — NSF specifies, for food zones, stainless needs to have a minimum chromium content of 16% and has nothing to do with whether or not it is magnetic.

Compliance Alloy

In the early 2000s, product substitution meant a new push to inform the manufacturer that type 430 has 16% chromium and is, thus, NSF 51-compliant. In many cases, a transition occurred in which buying organizations switched from 304 to lower nickel-bearing grades such as 301 or 201 before the switch to 430 occurred. In cases in which 430 could not be substituted for 301 or 201, the next wave of substitution came from higher-chromium ferritic grades such as 439 or 441. Both alloys were developed for the automotive market in which weldability and formability were necessary along with added corrosion resistance from the basic 409 automotive grade.

In residential appliances, the major manufacturers became reticent to move to magnetic stainless grades due to a perception that magnetic equated to not “real” stainless steel.

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Although stainless steel demand is expected to grow moderately this year, service centers are flush with inventory which is putting pressure on US mills.

Why Manufacturers Need to Ditch Purchase Price Variance

Combined with successive months of declines in nickel prices, service centers are only purchasing what is absolutely necessary. Both domestic mills and Asian mills have robust North American inventories, a stark contrast from a year ago when lead times went beyond the standard 6-8 weeks, causing service centers to seek alternative sources.

Technical Issues Hurting Mills

Another exacerbating factor in last year’s supply was Outokumpu’s technical issues with its cold-rolling mills and a lack of alternative domestic supply led service centers to seek other sources. With lead times extended, the domestic mills were able to pass through several base price increases in 2014.

With higher US base prices and the strength of the US dollar, Asian imports did not subside. Asian producers need other markets for their surplus material as Chinese demand is weak and both Europe and India have taken anti-dumping actions against China.

End market demand is strong for automotive,​ residential​ appliance and food service/food processing equipment. The only market that appears to be suffering is energy which is due to the low price of oil. Stainless demand is decent according to many sources and stainless base prices will remain under pressure.

Inventory Backlog

The North American market​ ​is ​saturated with inventory​ ​so​ lowering the base price will not spur on demand. Until service centers reduce their inventory backlogs and nickel prices start to improve, service centers will not buy, regardless of price. Service centers need to focus on getting their inventories in check before they resume anything resembling regular buying patterns. ​​Unfortunately, the mills are under pressure to book capacity which oftentimes leads to acts of desperation.

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Today in MetalCrawler, losses widened at a major stainless steel manufacturer, an aluminum giant gets a new CEO and two design and construction software companies team up for better workflows for HVAC designers and installers.

AK Steel Loss Widens

AK Steel Holding Corp. said its first-quarter loss widened from a year earlier on a big write-down related to its investment in iron-ore pellet joint venture Magnetation LLC.

Why Manufacturers Need to Ditch Purchase Price Variance

Average selling prices fell 8.9% from a year earlier, while shipments increased 39%, with a boost from an acquisition and strong demand from the automotive sector.

Ohio-based AK Steel in March predicted that shipments of carbon and stainless steel to the automotive market would remain strong because of market demand. However, the company warned that it expected its shipments to decline 14% from the fourth quarter to roughly 1.7 million tons on weakness in the carbon steel spot market, which AK Steel attributed to rising imports.

Martens Leaves Novelis

Novelis Inc., the US’ largest aluminum recycling and rolling company, has announced the departure of Philip Martens as the company’s president and CEO. Replacing Martens as president on an interim basis is Steve Fisher. Novelis says it has begun a search for a permanent CEO.

Martens, a former Ford Motor Co. executive, joined Novelis in 2009. During his tenure with Novelis the company shifted its focus toward servicing the automobile industry.

Vulcan Works With AECOsim for Ductwork

Geo-positioning and construction software manufacturer Trimble recently started supporting new construction modeling workflows with enhanced integration between Bentley Systems‘ AECOsim Building Designer software and Trimble’s Vulcan sheet metal cutting software for the HVAC market. The new workflow integration enables design models to be shared easily, securely and accurately. The move expands the companies’ ongoing collaboration around “Construction Modeling” and enhanced information mobility.

Vulcan is a sheet metal cutting software product for HVAC contractors, design/build firms and duct manufacturers, who rely on the software to increase shop productivity, plan duct design and installation and reduce waste.

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The Metals Service Center Institute (MSCI) recently held its Specialty Metals Division Conference in Phoenix. Attended by 236 people, the conference brought in member service centers and mills from the North American stainless, tool steel and nickel alloy industries.

While I am no longer part of the MSCI membership, I eagerly awaited the return of attendees to hear about it secondhand. The event, primarily networking in nature, included producers, distributors and service centers.

Free Webinar: MetalMiner’s Q2 and Q3 2015 Forecasts

Three key themes emerged from this year’s conference: stainless demand will grow this year, service centers must embrace their brands and also seek out innovation.

Anti-dumping Despite Demand Growth?

The specialty metals industry demand will see growth this year. Key stainless drivers in the automotive and appliance sectors have solid demand. Stainless prices, however, remain under pressure even though domestic mills announced base price increases in Q4 2014. Nickel’s London Metal Exchange decline in recent months and the import surge has placed downward pressure on stainless prices.

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Here at MetalCrawler, a mini-rally in Chinese nickel has us questioning the downward trend our favorite stainless steel alloying metal is in.

Is Chinese Stockpiled Nickel Ore Finally Running Dry?

Reuters’ Andy Home writes that supply stresses in China’s giant nickel pig iron (NPI) sector are accumulating. China’s nickel ore imports slumped below 1 million metric tons in February for the first time since February 2010.

Free Download: Cut Your Nickel Ore Shipping Costs

Home writes that, at some point, China will return in a big way to the import market, pushing the global market into supply deficit.

Oil Prices Back on the Rise

Oil prices rose Friday ahead of the release of US drilling data and amid uncertainty about Iranian nuclear negotiations.

Light, sweet crude for May delivery climbed 1%, to $51.29 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose $1.11, or 2%, to $57.68 a barrel on ICE Futures Europe.

The moves capped a volatile week of trading, as investors continued to assess the global glut of oil that sent prices plunging in 2014. Both contracts were on track to post a weekly gain.

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It was supposed to be a test case for the stainless steel industry of India.

Free Download: Cut Your Nickel/Stainless Shipping Costs

One of the country’s leading steel makers, Jindal Stainless Ltd. (JSL), had applied to the government for the imposition of a safeguard duty on foreign stainless steel, but the Directorate General of Safeguards (DGS) rejected the application, much to the consternation of JSL and the rest of India’s stainless steel industry.

The DGS falls under the Finance Ministry’s Department of Revenue. In its order, the DGS ruled JSL had failed to prove that there was “injury to the domestic industry as a result of the cheap imports.”

A JSL spokesperson told The Economic Times that the company was disappointed with the ruling.

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Rio Tinto can’t count on aluminum to help it turn a profit. India places tariffs on imports of stainless from China, South Korea and Malaysia. Tepid housing demand in China is what’s caused all of its steel exports in the first place and gold is showing some resiliency.

Free Download: Lock in Shipping Costs for Seaborne Iron Ore

MetalCrawler searches the globe far and wide for the latest in metal market news and trends.

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There was a 38% increase in stainless steel imports to India between April and December last year compared to the same period in 2013. This steel sector has now sought government intervention and asked it to increase import duties.

Free Download: Trade Automation Can Save Millions

While the manufacturers are pleased that India’s infrastructure spending is going up, they hope that construction spending will translate into more consumption of their products and they don’t want domestic steel to be left behind.

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We thought 2014 was over? The bear market seems to have followed us into 2015.

Don’t miss this free download of our Monthly MMI® Report, covering price trends in 10 metals markets.

The fall in oil prices that began last year has battered the base and industrial metal sectors this month and the investment metals didn’t fare much better in MetalMiner’s Monthly MMI®. All but 3 indexes fell, including the previously fundamentally strong ones: Aluminum, the Stainless MMI and Global Precious.

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Goodbye, 2014, it was nice to know ya. At least that’s what several industrial metal sectors are thinking – if we were to anthropomorphize them – after the latest December reading of MetalMiner’s Monthly MMI®, in which the majority of indexes fell, including biggies Raw Steels, Aluminum, Copper and Stainless MMIs. Granted, those four indexes were […]

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