A realization of the Senna Inox
(Photo by archive)
The price of nickel, suspended yesterday on the London Metal Exchange because its price has doubled in one day (after having already scored several consecutive significant increases), is splashing, also breaking through 100 thousand dollars a ton on the Asian markets. The unexpected increase in raw materials risks knocking out Italian (and European) metallurgy, with stainless steel processing already decelerating sharply due to the rises in recent months and now facing a sudden vertical wall to climb.
Nickel is a key component of stainless steel, and Russia is among the top producers in the world. The risk of an export embargo on raw materials (by Western countries but also by Russia itself, which yesterday announced the preparation of a list of countries to which the transfer of raw materials and finished products will be prohibited) has made prices soar, which cascade over the next few days and weeks will spill over into stainless steel prices, which have already been under tension for at least four or five months. The risk is that the orders, already slowed down a lot due to the doubling of the price of stainless steel from October to today, will now disappear completely, even going so far as to stop production.
Maurizio Senna, from Senna Inox in Graffignana, explains it well: «Until December we worked on continuous shifts, including Saturdays, now I am forced to put the employees who have more back holidays to rest – says Maurizio Senna -. The price of steel was 3 euros or 3.5 euros per kilogram until October or November. Then gradually it got up a little at a time until it reached 7 euros today. And the fears are that this rise now instead of stopping could accelerate again with the tensions on international markets triggered by the war ». For 4 or 5 years the price of steel had remained essentially stable and unchanged. «So the first increases were tolerated, but then the race never ended and this translates into estimates that are impossible for customers to sustain – continues Maurizio Senna -. In November we produced 500 shelves for a Tuscan dairy, now we have discussed for a further 500 shelves, but the estimate has skyrocketed by 60-70 percent more, and the customer has preferred to postpone. And like him many others: those who do not strictly need, suspend orders. And consider that we work above all for food or pharmaceutical companies, two sectors that certainly do not stop ».
The problem has not yet exploded today, but from June onwards the risk is that of paralysis. «Today we are working with the orders of October, November and December – concludes Maurizio Senna -. In a few weeks, however, those commitments will be closed, and from December to today the orders have collapsed. If there is no immediate trend reversal, we will feel the full decline from June onwards. Maybe something is starting up again because some customers have postponed but can’t do it indefinitely. However, the risk of stopping exists ».
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