To say the stainless market is in a bit of a mess is something of an understatement. From a peak in May 2007 both nickel and stainless prices have been in a relentless downward spiral, the one feeding off the other. It was hoped the combination of mine closures in Australia and the Dominican Republic, plant refurbishment at Kalgoorlie and the comparatively high production costs of Chinese nickel pig iron production would all support the nickel price but the lack of demand has meant prices have continued to slide. Though European and Asian mills have cut back production of stainless steel, China has continued to increase production by 8% year over year to a projected 8.2 mt for 2008. Domestic nickel pig iron production has remained unchanged at about 85,000 tons but nickel stocks have remained stubbornly high, both in Chinese ports and on the LME, suggesting the market is still in surplus and prices for both nickel and stainless could continue to slide.