Production cost of the company has reduced with fall in nickel prices, benefits of which can be passed onto customers; Nickel prices have been volatile in last two years. The metal price is expected to weaken further in second half of the current year. The reasons for the fall in prices of Stainless Steel 304 are weak demand in China and strong dollar; the falling prices will not impact margins to a great extent. Anti-dumping duty was imposed on one grade of stainless steel by the government. To protect the industry from low imports, government needs to monitor the basic custom duty. It’s not good for Indian economy.
Nickel has fallen a lot in the past week can you tell us how much of a positive impact it could have on your margins? A: If the nickel price comes down, our present cost becomes cheaper and we pass on the benefits to our customers. If you see the basic reason for nickel crushing down in January 2012, there was ban on the Indonesian ore. So, there was a bullish situation where the nickel price went up to USD 21,000. In 2014 also there was rumor in the market that Philippines ores may be banned. That time also it touched USD 21,000. Recently, In their forecast have given a very weak forecast for the nickel for the second half of the 2015. A couple of week back it touched 12,300 level and now it is at 11,000 levels. It is happening mainly due to lower demand in China, strong dollar and weaker crude price. It is not only reducing the nickel price, but all the base metals are coming down.
If any reduction in price of the input material happens most of the steel mills they pass on their benefit to the customer because it is a highly competitive market. Government had imposed an anti-dumping duty on HR flat products of a particular stainless steel grade 304. Dynamic forge & Fittings (I) P. Limited is a leading manufacturer of SS 304 pipe fittings, flanges, SS 304 Butt weld Fittings has discounted 20 % off on SS 304 forged fittings.