Chinese stainless products remained steady (in terms of prices in their local market) from May to June. However, China’s Baosteel announced on May 29 that it would lower its stainless prices, which will impact June pricing (the Monthly MMI series tracks price movements from month to month).
“We need to look no further than the nickel market to create a picture of what has happened to the stainless market, ” said Lisa Reisman, managing editor of MetalMiner. To revisit a fun little equation from a two-part MetalMiner series that ran on May 21 – supply from new mines + supply from existing mines + Chinese Nickel Pig Iron (NPI) swing production = oversupply in a lackluster stainless market.
“On top of an oversupplied nickel market, we continue to see price weakness for steel products, both hot-rolled coil and cold-rolled coil, despite rising scrap prices,” Reisman continued.
Lower prices for Chinese nickel pig iron and the closure of higher cost facilities could eventually create a small lift in prices. Locking forward a percentage of known demand might make sense, though we will continue to watch the demand cues. Recent news about US durable goods orders exceeded demand expectations, suggesting growth in residential housing markets, automotive sales and equipment orders.
However, we remain slightly less optimistic about the auto sector than most analysts due to our own Automotive MMI® readings. (Our June Automotive MMI® report comes out later this week.)
Current Month’s Stainless and Nickel Prices
The monthly Stainless MMI® registered a value of 83 in June, a decrease of 2.4 percent from 85 in May.
A 7.5 percent drop left the Allegheny Ludlum 304 stainless surcharge lower. Following a 6.1 percent decline, the Allegheny Ludlum 316 stainless surcharge also finished lower.
The spot price of nickel declined 3.8 percent on the LME over the month to $14,625 per metric ton. The price of Chinese primary nickel closed the month after dropping 3.4 percent. Last month, the nickel 3-month price dropped 3.0 percent on the LME to $14,795 per metric ton. Chinese 304 stainless steel scrap prices effectively decreased very slightly for US buyers, by 0.6 percent this month. Chinese 304 stainless coil closed the month after dropping 0.6 percent as well.
Last month was consistent for Chinese ferro-chrome, which did not move. Chinese ferro-moly experienced a flat month. Chinese 316 stainless steel scrap traded sideways, and Chinese 316 stainless coil held pat.
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.