MetalMiner’s monthly Stainless MMI® bounced back two points to a value of 80 in January, a 2.6 percent drop from December’s reading.
Nickel prices found support last month, driving the index up. The 3-month price of nickel rose 3.8 percent on the LME, while transactional prices of Chinese and Indian primary nickel went up by 3.4 and 3.5 percent, respectively.
The picture might look positive for nickel, but according to last month’s MMI report, we called for higher prices in the month of December as nickel prices bottomed at the end of November.
Indeed, nickel went up and found resistance again at levels lower than previous peaks, falling back again since the end of December:
We are still bearish on nickel. However, Indonesia’s ban on unprocessed mineral exports set to begin on Jan. 12 could change the picture. Investor sentiment could drive nickel prices up, even though Chinese buyers have been stocking up ahead the ban and we don’t think this ban will cause constrains in the near term.
We believe that trying to determine how and when this ban will impact nickel prices is nothing more than a guess. Therefore, we will remain cautious and see how the market reacts. Check out MetalMiner’s nickel price forecasting offering.
What This Means For Metal Buyers
Nickel, the main driver of stainless prices, remains in a downtrend. Folks are calling for higher nickel prices due to the Indonesia export ban; however, with a price-falling tendency and both nickel and stainless markets still remaining in an oversupply situation, steering clear of placing forward buys yet may be a good way to go. We do suggest watching the market closely for new signals.
Other Key Price Drivers
After dropping the previous month, the nickel spot price prices rose 4.5 percent on the LME to $14,010 per metric ton.
Allegheny Ludlum 316 stainless surcharge prices fell 1.9 percent, and Allegheny Ludlum 304 stainless surcharge prices dropped 1.8 percent.
Chinese ferro-chrome held pat last month, as did Chinese ferro-moly. Chinese 304 stainless steel scrap experienced a flat month, joining Chinese 316 stainless steel scrap, Chinese 304 stainless coil and Chinese 316 stainless coil in not budging.
The Stainless MMI® collects and weights 14 global stainless steel and raw material price points to provide a unique view into stainless steel price trends over a 30-day period. For more information on the Stainless MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.