At the doorstep of 2017. Dramatic start to be expected.

Dear Customers,

Christmas and New Year is almost here - we are now at the threshold of 2017.

At Dacapo we look back at 2016 with content. Clearly the first half of the year was challenging with falling prices and intensive competition, whereas milder winds were blowing during the second half bringing good demand and higher prices. All-in-all 2016 finishes on a satisfactory high note, with sales records achieved in all product groups and in all Dacapo companies.

We strive to live up to our motto “easy to do business with”, and we firmly believe that exactly that is an important cause for the fine growth and high number of new customers we have experienced this year.

We would like to take this opportunity to express our gratefulness to the new as well as the many older loyal customers. We thank you for the year now bygone and for the business you gave to us.

Shot on a fine midsummer day, here is a photo of Dacapo’s head office in Silkeborg, Denmark:

   

We have just celebrated three 10-year anniversaries at Dacapo. This means that 20 out of a total of 95 colleagues have worked for Dacapo for more than 10 years out of the 13 years we have been in existence. Of this we are immensely proud.

The anniversaries made it a good occasion to look 10 years back. During each of the last 10 years Dacapo has grown. Overall our sales have quadrupled bringing this year’s sales volume to 22.000 tons of stainless steel. More impressively and to our great satisfaction our fittings sales have grown more than 25-fold, propelling this year’s fittings sales to almost 17m€.

This is an important development of which we are proud – a development, which is set to continue.

Gazing just a little bit ahead, we are looking at a 1st quarter 2017, which is guaranteed to bring turbulence and price increases to an extent we haven’t seen for a great many years. To exemplify this the tube mills have just introduced price increases of more than 20 % from December to January.

The root cause is a dramatic change in the balance between supply and demand, driven essentially by a drastic reduction in the supply of flat rolled products from China. The Chinese strategy seems to have changed completely from a persistent focus on volume to one on profitability pollution reduction.
At the same time a shortfall of certain alloying elements has exacerbated the situation. All this combined will push up the prices of flat rolled products and consequently also of tubes. At the time this is written, the situation can best be described as semi-chaotic, as many mills decline to make offers and those who do so quote with just 1 day’s price validity, while not hesitating to reject orders or confirm only with higher prices than originally quoted.

Consequently, we predict dramatic changes in the prices of stainless steel during Q1 2017, even it may be a tad too early to trying to guess exactly where it all ends up. Challenging it will be for sure, and we recommend our customers to think ahead a little bit further than might be usual.

In closing allow us to extend to all our customers, suppliers and other business friends a Merry Christmas and a Happy New Year.

See you in 2017

22 December 2016    News