The Stainless MMI® took a rather large blow in May, falling 6 points from 91 to 85, primarily on the back of falling nickel prices, falling 304 prices in China as well as 304 China scrap prices.
A nickel glut has forced down the price by nearly about 50 percent since 2011, according to a recent Reuters report.
In addition, durable goods orders also fell for the month of March by 1.7%, according to Gerdau Market Update. This has placed pressure on stainless prices. “The combination of too much nickel capacity, combined with muted stainless demand on a global basis, will continue to place a cap on stainless prices,” said Lisa Reisman, managing editor of MetalMiner.
“Consumer confidence can weigh heavily on durable goods orders purchasing decisions,” she continued. Commentary from Gerdau Market Update provides insight into the impact of consumer confidence on spending:
“Consumers planning to buy autos and appliances slumped in April while inflation expectations decreased from 5.8 in March to 5.5. Consumers are still weary from the social security tax increase and worries about the effect sequestration will have on the economy. This coupled with political uncertainty in Washington have contributed to the high level of volatility seen in the index in recent months.”
Key Price Drivers
Primary 3-month nickel prices fell 8.7 percent on the LME to $15,250 per metric ton after rising the previous month. After rising the previous month, primary cash nickel prices dropped 8.1 percent on the LME to $15,195 per metric ton. Following a 7.3 percent decline in price, Chinese 304 stainless steel scrap finished the month at $2,675 per metric ton. A 7.3 percent drop over the past month left Chinese 304 stainless coil at $2,675 per metric ton. Following a 5.9 percent decline, the price of Chinese primary nickel reached $17,641 per metric ton. After falling 3.7 percent, the Allegheny Ludlum 304 stainless surcharge finished the month at $0.74 per pound. The Allegheny Ludlum 316 stainless surcharge closed the month at $1.04 per pound after dropping 3.7 percent. Chinese 316 stainless coil prices fell 2.6 percent to $4,216 per metric ton after rising the previous month.
Hovering around $1,346 per metric ton for the month, Chinese ferro-chrome remained unchanged. Last month was consistent for Chinese ferro-moly, which did not move from $23,511 per metric ton. The price of Chinese 316 stainless steel scrap held steady around $2,610 per metric ton last month.
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.