Stainless steel sales typically pick up in September, particularly in Europe and North America, as consuming sectors return to work after the summer vacation period.

This burst of activity is an important boost for the industry before purchasing slows again in the final months of the year, as companies run down for the Christmas and New Year holidays and attempt to control inventories for their year-end financial statements.

No such upturn
Last month, though, market participants reported no such upturn. Customers and traders are now very cautious as macroeconomic pressures have added to their usual reluctance to purchase in a falling market. However, underlying demand is no worse than it has been in recent times. Indeed, it is far better than it was immediately following the global crisis in 2008/9.

The financial problems
The ongoing financial problems in the eurozone have a ripple effect on the global economy. Although Portugal and Ireland have exhibited some positive signs on the road to recovery, Greece looks increasingly likely to default on its debt. Meanwhile Italy, one of the eurozone's major players, is struggling to reassure the markets of its serious intention to cut its public deficit.

The US President, Barack Obama, has recently stated that the European financial problems have added to America's economic woes. The political stand-off between the Democrat President and the Republican-led Congress cannot help, either.

Little hope for recovery in growth
The gloom about worldwide economic prospects has resulted in falling business and consumer confidence. Forward-looking purchasing managers' indices hold out little hope for a recovery in growth in the short term.

Lower values in the near future
All these factors contributed to recent slides in various commercial markets. Prices for a number of commodities, including nickel, dropped by more than 10 percent in two days in mid-September. Raw material costs enable stainless steel buyers to predict, to some extent, forward prices. Inevitably, their inclination is to purchase no more than is absolutely necessary when lower values are foreseen for the near future. The wider economic considerations described here will only add to their mood of caution.