The monthly Stainless MMI® registered a value of 93 in January, a decrease of 1.1 percent from 94 in December.
“Despite a slight drop in this month’s stainless price index from 94 to 93, the fundamentals for stainless steel maintain respectable support,” said Lisa Reisman, managing editor of MetalMiner.
“The index fell because of slightly weakened nickel prices for both the LME and Indian nickel markets…we have seen price strength for most forms of stainless steel,” she continued.
Rising stocks of nickel at LME-registered warehouses will continue to put price pressure on nickel as stocks reach the 144,000-ton level. As with most metals, more traditional supply and demand fundamentals will drive the price equation.
In terms of demand, Whirlpool CEO Jeff Fettig said last month that white goods demand will continue to bounce along the bottom, but eventually demand will increase as the housing market continues to rebound.
Institute for Supply Management (ISM) data also suggests stainless should see some price support as the manufacturing index moved from 49.5 to 50.7 this month, with survey respondents indicating that stainless steel has increased in price. This data runs does not run counter to the Stainless MMI® because the stainless steel elements of the MMI increased in price; only the nickel component created price weakness.
Primary Price Drivers of Index Decline
After rising 5.7 percent the previous month, Chinese primary nickel prices dropped 4.9 percent. Primary 3-month nickel prices fell 0.4 percent on the LME to $17,155 per metric ton after rising 10.3 percent the previous month.
However, the Allegheny Ludlum 304 stainless surcharge closed the month by gaining 6.8 percent. The Allegheny Ludlum 316 stainless surcharge rose 5.8 percent.
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.