stainless steel price

Allegheny Technologies, Inc. shares tumbled 15% Tuesday after the Pittsburgh-based specialty metals producer reported a larger than expected third quarter loss and missed analyst revenue estimates as well.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

The company lost $530.8 million, or $4.95 per share, vs. a loss of $144.6 million, or $1.35 per share, in the year-ago quarter. Sales fell 7% to $770.5 million. Analysts had expected the company to report an adjusted loss of 10 cents per share and revenue of $822 million.

ATI also announced the permanent closing of the idled Midland stainless steel melt shop and finishing operation in Beaver County, Pa.

It also permanently closed its Bagdad plant in Gilpin, Pa., whichemployed about 225 people. It produced grain-oriented electrical steel prior to the start of the six-month lockout of union workers in August 2015. Midland employed around 250 workers.

“The decision helps provide clarity to some of the people who had hoped that there would be a restart,” ATI spokesman Dan Greenfield said.

In December, the company announced it was mothballing both facilities with the possibility that they would reopen if market conditions for those products improved.

Free Download: The October 2016 MMI Report

Richard Harshman, ATI’s chief executive officer, said that has not happened. He announced the move as part of the company’s third-quarter earnings statement.

Our Stainless MMI rose 4% in September. The complexity and uncertainty of the supply equation is giving support to nickel prices, so far, this year.

Philippines To Close More Mines

Philippine nickel production is down 24% for the first seven months of this year. The Philippines had already suspended eight nickel mines in previous months and more suspensions were expected. On September 27th, the government announced that 20 more of its mines would be suspended for environmental violations.

Stainless_Chart_October-2016_FNL

The suspended mines and those at risk represent nearly 60% of output in the Philippines, the world’s largest producer of nickel ore and top supplier to top buyer China. China’s imports of nickel ore and concentrates from the Philippines fell 21.3% in the first eight months of year to 17.99 million metric tons.The uncertainty surrounding Philippines’s output is the bullish side of nickel’s story.

Indonesia in Play

Meanwhile, it looks like Indonesian production is now in recovery mode. Indonesian supply rose 30% in the first seven months this year. Ferronickel is an intermediate stage product between ore and refined metal, and Indonesian exports of ferronickel to China have surged this year.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

At the same time as refined nickel production in Indonesia is rising, as the popualce wanted, Indonesia is also considering whether to resume raw nickel ore exports. The decision is expected within weeks. Nickel smelters now fear the rule changes as they could weaken nickel prices, especially those companies that make semi-finished and refined metal.

Price Outlook

It’s worth noting that while nickel has performed strongly this year, it’s still well below the levels five years ago when the metal peaked near $29,000/mt. It seems that prices have room on the outside but more tightness is needed in nickel markets.

Two-Month Trial: Metal Buying Outlook

Indonesia relaxing the 2014 export ban could add pressure to nickel prices. On the other hand, prices might continue to get a boost while The Philippines keeps on punishing mines that don’t meet environmental standards.

Stainless Markets

The Department of Commerce found that Chinese stainless steel sheet and strip producers illegally dumped — sold at less than fair value — their products in the U.S, assigning a preliminarily dumping margin of 64-77%.

For full access to this MetalMiner membership content:
Log In |

The Department of Commerce has preliminarily found that Chinese stainless steel sheet and strip producers illegally dumped — sold at less than fair value — their products in the U.S.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

Commerce preliminarily found that dumping occurred by mandatory respondents, Shanxi Taigang Stainless Steel Co., Ltd. and Tianjin Taigang Daming Metal Product Co., Ltd. Commerce also determined that the mandatory respondents are not eligible for a separate rate, and therefore part of the China-wide entity.

Commerce calculated a preliminary dumping margin of 63.86% for the non-selected respondents eligible for a separate rate. Commerce preliminarily assigned a dumping margin of 76.64% based on adverse facts available for all other producers/exporters in China that are part of the China-wide entity due to their failure to respond to Commerce’s requests for information.

As a result of the preliminary affirmative determination, Commerce will instruct U.S. Customs and Border Protection to collect cash deposits based on these preliminary rates.

The petitioners for this investigation are AK Steel Corporation, Allegheny Ludlum, LLC d/b/a ATI Flat Rolled Products, North American Stainless, and Outokumpu Stainless USA, LLC.

Two-Month Trial: Metal Buying Outlook

Commerce is scheduled to announce its final determination on or about November 25.

After gaining sharply in June and July, our Stainless MMI retraced last month. Nickel’s rally cooled down in August after a pick up in Indonesian ferronickel supply rekindled previous fears of a global supply shortage.

Philippines Supply Declines

In June and July, nickel rallied as the Philippines reviewed all existing mines in order to close those that had adverse impacts on the environment.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

At least eight nickel mines have been shut down so far this year, cutting around 10% of the country’s capacity.

Stainless_Chart_September-2016_FNL

The Philippines is by far the largest nickel ore supplier to China since Indonesia imposed an export ban for unprocessed material back in 2014. Recent numbers are already showing this decline in production. For the first seven months, China imported 13.84 million metric tons from the Philippines, down 27% from the same period last year.

The current disruptions in the Philippines have no doubt tightened the market for nickel ore triggering a price rally this year. However, in August investors questioned whether this shortage in China’s nickel-pig iron industry will actually translate into a shortage of nickel in the global market.

Indonesian Refined Nickel Supply Picks Up

While supply of nickel ore to China is declining due to current disruptions in the Philippines, supply of refined nickel to China is rising as Indonesia ramps up production.

China’s imports of ferronickel from Indonesia came at a five-times higher-rate than the amount taken in the same month a year earlier. For the first seven months, China’s imports of ferronickel from Indonesia surged more than four-fold to 390,700 mt. Comparing apples to apples, the nickel content of the year to date of ferronickel exports equals about 4 million mt of nickel, slightly less than the 4.13 mmt loss in the Philippines so far this year.

For this reason, we hear some analysts saying that China isn’t importing less nickel, it is just changing the form in which it imports the metal. And, as prices retrace, it’s no wonder that this reminds us to what happened just two years ago when nickel prices soared to then fall precipitously.

Is This Time Different?

Back 2014, nickel prices surged as Indonesia prohibited ore exports. However, prices sold-off later on as miners in the Philippines moved into the trade. This time, it’s the other way around. Environmental restrictions are shrinking supply in the Philippines while Indonesia is making up for that loss.

Two-Month Trial: Metal Buying Outlook

While prices fell in August, we need to be reminded that prices don’t move in a straight line and that, so far, the decline seems like normal after nickel gained over 30% in June and July. Also, there are two other factors that make us think that the decline won’t be as severe as back in 2014:

  • Back in 2014, nickel prices rose independently while the rest of the industrial metal complex was falling. This time, it’s not only nickel but we also see many industrial metals rising. The bullish sentiment on base metals this year should help limit nickel’s fall.
  • It’s barely been a month since the Philippines started to shut down mines and volumes may be squeezed further after the shutdowns accounting for about 15% of output. Recently, the Philippines’ mining minister said that there will absolutely be more suspensions following the eight already suspended.

For these reasons, we wouldn’t turn bearish on nickel just yet…

For full access to this MetalMiner membership content:
Log In |

We rarely see such positive growth in metal prices as we did in the August MMI Price Trends Report.

MM-IndX_TRENDS_Chart_August2016_FNL-TOPVALUE100

All the metals we track were up save for Aluminum, which fell only 1.3%, and renewables and rare earths, which held flat. The Stainless Steel MMI increased 9% amid uncertainty about Chinese nickel ore supply after mining crackdowns in top supplier, the Philippines.

Two-Month Trial: Metal Buying Outlook

Meanwhile, the most bullish of bull runs continued for our Global Precious MMI which added a 7.2% increase to its jump last month to knock on the door of the top 10% of the IndX. The platinum group metals had strong increases along with gold and silver this month.

Wall Street Bull

“Hey metal buyers, remember me?” Wall Street bull courtesy of iStock.

Palladium, particularly, made higher highs and stumbled to lower lows in classic bull market fashion.

So buy quickly before prices increase more, right? Wrong. Our Raw Steels MMI posted a healthy 4% increase, but it’s still heavily dependent on China’s stimulus programs to keep demand up in the largest global consumer of steel products. If there is a pullback in stimulus, prices could fall dramatically. The same is true for copper.

Unlike diamonds, bullish trends in commodities and industrial metals don’t last forever. Continue to make informed buying decisions in this thriving market — watch China’s stimulus program and the strength of the U.S. dollar post- Brexit — and remember that today’s price strength might be tomorrow’s carpet getting pulled out from under your feet.

Nickel, the main price driver of stainless steel, scored gains of 11% during the month of July causing our stainless MMI to surge by 9%.

Two-Month Trial: Metal Buying Outlook

Industrial metals entered bull market territory earlier this year and that puts the wind behind nickel’s back. Apart from the more bullish macro environment, we are witnessing two key developments within nickel’s industry that are undoubtedly adding fuel to this rally.

Tighter Environmental Rules

The Philippines isn’t joking around about tightening its environmental rules. On the first of the month, the Philippines new President, Rodrigo Duterte, used some bold words against his country’s miners: “We will survive as a nation without you. Either you follow strictly government standards or you close down.”

Stainless_Chart_August-2016_FNL

The country has so far suspended the operations of seven domestic nickel mines for failure to comply with environmental regulations. Moreover, the new mining minister, Regina Lopez — a committed environmentalist — recently vowed to close more nickel mines causing environmental destruction.

Compare Prices With The July 2016 MMI Report

The Philippines is the biggest supplier of nickel ore to top consumer China since Indonesia banned shipments of unprocessed mineral ores back in 2014. The recent suspension of mines and the risk of more closures lifted nickel prices over the past few weeks.

Surge in Nickel Imports

Although the metal has benefited for the most part from a bull narrative of supply shortfall this year. The bulls are finding more reasons to bet on nickel amid growth in Chinese demand, which is being reflected in the surge in Chinese imports this year. Refined nickel imports in China have surged by 189% to a record 226,100 metric tons in the first half of the year.

What This Means For Metal Buyers

The Philippines is the top supplier of nickel ore to China and these new developments have sparked concerns about ore supply. Moreover, demand seems solid thanks to China’s stimulus measures. These two factors, combined with a bull sentiment across the industrial metals complex, have given buyers enough reason to take risk off the table as prices could continue to trend up.

Sign up for MetalMiner membership for all stainless steel prices.

For full access to this MetalMiner membership content:
Log In |

Vale SA is looking to sell part of its future iron ore output for Chinese cash today and the Philippines’ nickel mining crackdown has claimed its seventh victim.

Vale Brings in Chinese Investors

Brazil’s Vale SA is considering raising as much as $10 billion from the sale of up to 3% of future iron ore output to undisclosed Chinese companies, two sources with direct knowledge of the matter said.

Two-Month Trial: Metal Buying Outlook

Under terms of the deal, Vale, the world’s biggest iron ore producer, would receive streaming financing from the companies.

Philippines’ Crackdown Claims 7th Nickel Miner

The Philippine government has suspended the operations of a seventh nickel miner, Claver Mineral Development Corp., a minister said on Thursday, deepening an environmental crackdown that has caused jitters in global nickel markets.

Free Download: The July 2016 MMI Report

The Philippines is the biggest supplier of nickel ore to top market China and the suspension of some mines and the risk of more closures sent global nickel prices to an 11-month high of $10,900 a metric ton on July 21.

The Commerce Department said construction spending declined 0.6% to its lowest level since June 2015 after dipping 0.1% in May. June marked the third straight month of declines in outlays.

Two-Month Trial: Metal Buying Outlook

Economists polled by Reuters had forecast construction spending increasing 0.5% in June after a previously reported 0.8% drop in May. Their June estimates were largely based on the government’s assumptions for private residential and nonresidential construction spending in the advance GDP report.

Construction_Chart_August_2016_FNL

Weak nonresidential spending and a pullback in home building were credited for the drop. Our Construction MMI still increased from 66 to 67 this month, largely based on jumps in still-in-demand steel products such as rebar and H-beams. Those prices made up for steep drops elsewhere to eke out the 1.5% increase.

However, weak U.S. economic growth seems to have finally hit the construction industry, previously a bright spot of the U.S. economy. A third straight month of declining construction spending will certainly be reflected soon in overall purchasing.

“It’s a deceleration process after two years of fairly decent growth,” Robert Murray, chief economist of Dodge Data & Analytics, told Reuters.

Compare Prices With The July 2016 MMI Report

The slowdown can be seen in construction payrolls. Adjusted for seasonal fluctuations, the number of people working in construction has dropped by 22,000 since hitting a post-recession peak in March of about 6.7 million.

Sign up for MetalMiner membership for all construction metal prices.

For full access to this MetalMiner membership content:
Log In |

Today, the Dept. of Commerce placed import duties on stainless steel sheet and strip from China to counteract Chinese government subsidies.

Non-coil stainless is included in a new anti-dumping petition. Source Adobe Stock/Jovanning.

The merchandise covered by this investigation is stainless steel sheet and strip, whether in coils or straight lengths. Source Adobe Stock/Jovanning.

The countervailing tariffs are initial duties placed on the imports due to a preliminary affirmative investigation showing that there was subsidization by several levels of government in China.

Two-Month Trial: Metal Buying Outlook

Commerce calculated a preliminary subsidy rate of 57.30% for mandatory respondent Shanxi Taigang Stainless Steel Co. Ltd. Mandatory respondents Ningbo Baoxin Stainless Steel Co., Ltd. (and its cross-owned companies Baosteel Stainless Steel Co., Ltd., Baoshan Iron & Steel Co., Ltd., Baosteel Desheng Stainless Steel Co., Ltd., Baosteel Co., Ltd., Bayi Iron & Steel Co., Ltd., Ningbo Iron & Steel Co., Ltd., Shaoguan Iron & Steel Co., Ltd., Guangdong Shaoguan Iron & Steel Co., Ltd., and Zhanjiang Iron & Steel Co., Ltd.) and Daming International Import Export Co. Ltd. (and its cross-owned company Tianjin Taigang Daming Metal Product Co., Ltd.) either notified Commerce that they would not participate in this investigation or did not, in fact, participate in the investigation. Read more

Our Stainless MMI rose 6% to 54 points in May. Similar to copper prices, nickel prices are showing a recovery this year, but the gains have been small compared to other industrial metals.

Two-Month Trial: Metal Buying Outlook

Nickel’s price fall last year caused some miners to curb production. Some of these production cuts went into effect in 2015, helping prices to find a floor this year. However, the cuts haven’t been enough for the markets to really make a bull run. Global nickel supply is still running strong as the supply side has proved quite inelastic to low prices with most producers hanging on while they hope Chinese pig-iron producers will close down first.

Stainless_Chart_May-2016_FNL

Recently, Russia’s Norilsk Nickel, the world’s largest nickel miner, said that in order for a sustained recovery to happen, more cuts will have to materialize. According to the company, over 20% of the global nickel supply needs to be cut if we want to see a sustained recovery in prices. However, we have yet to see anything close to that since, so far this year, there haven’t been any supply cut announcements. The latest significant production cut was announced late in 2015. Read more