Stainless, Nickel Outlook: Base Prices Up; Surcharges at Historic Lows

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graph of historic stainless nickel price trends september 2013

MetalMiner’s monthly stainless steel-nickel-ferroalloy price index increased 2.5 percent, from 79 in August to 81 in September. Despite the improvement, the Stainless MMI® remains the poorest performer of the major industrial metals, which we define as aluminumcopper and steel.

The complex received a lift on the back of rising nickel prices as well as US stainless steel base price increases. However, US stainless steel surcharges for 316 and 304 alloys have reached their lowest levels this month since the MMI indexes launched back in January 2012. Base prices tend to change little over time, so the surcharges become more significant going forward as they remain subject to volatility.

“The long-term fundamentals for nickel still appear weak, which will act as a drag on stainless prices,” said Lisa Reisman, managing editor of MetalMiner. “However, short-term market fluctuations have little to do with actual supply and demand fundamentals…nickel remains subject to market momentum, perceptions, and current economic conditions.”

Check out MetalMiner’s new nickel price forecasting capability.

Consumer confidence plays a role in longer-term demand fundamentals for stainless because durable goods and automotive sales impact stainless demand. Here, our friends at Gerdau Market Update suggest that though consumer confidence numbers have ticked up in the most recent three-month moving average, the news remains mixed as some consumers report they plan on buying homes and appliances, but compared to a year ago, will have lower demand for cars.

Price Drivers of the Stainless Index

The 3-month price of nickel closed the month up 9 percent on the LME at $14,875 per metric ton. The price of Chinese primary nickel rose 5.4 percent.

* Get the complete prices every day on the MetalMiner IndX℠

However, a 5.7 percent drop left the Allegheny Ludlum 316 stainless surcharge down at its historic low. The Allegheny Ludlum 304 stainless surcharge decreased by 1.8 percent this month.

Prices for Chinese ferro-chrome appreciated a bit. Last month was slightly better for Chinese ferro-moly as well. Chinese 304 and 316 stainless steel scrap and coil prices all increased slightly.

Don’t forget to read August 2013 MMI analysis before September’s full report comes out next week!

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.

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