The monthly Stainless MMI®, tracking global stainless steel, nickel and ferroalloy prices, continues to act as the poorest performing of the major industrial metal indexes tracked by MetalMiner. October’s index fell by two points, to 79. Weak nickel prices continue to hamper this complex.
“I wish we had a different story to tell for stainless steel,” said Lisa Reisman, managing director MetalMiner. “Even if stainless demand notches up a bit in major markets such as China, the US and Europe, the market remains in an oversupply situation, both for stainless as well as nickel.”
Major Nickel Oversupply Issues
The International Nickel Study Group (INSG) forecast just last Thursday that nickel producers face a global surplus of 140,000 metric tons this year due to disappointing demand and new production projects, as reported by Reuters.
Global demand from the rest of the world, excluding China and India (where usage was still on the high side), has been middling at best.
Nickel, Stainless Price Outlook
The only price risk to the upside that we can see involves the Indonesian export ban of nickel ore scheduled to go into effect in January 2014. If that ban actually limits exports, we could see some nickel price support and it could come swiftly.
However, we don’t anticipate any major changes in the demand equation to support stainless prices in the near term.
Key Price Drivers of Stainless/Nickel Index
The Allegheny Ludlum 304 stainless surcharge finished the month at $0.64 per pound after dropping 1.5 percent. The Allegheny Ludlum 316 stainless surcharge fell a slight 1.2 percent over the past month to $0.88 per pound.
Chinese primary nickel prices fell 5.9 percent to $15,912 per metric ton after rising the previous month. On the LME, the 3-month price of nickel dropped 6.4 percent over the past month to $13,930 per metric ton.
Chinese ferro-chrome was up only mere pennies, to about $1,356 per metric ton.
At a price of $2,679 per metric ton, Chinese 304 stainless steel scrap was up marginally. Prices for Chinese 316 stainless steel scrap increased marginally as well, holding at around $2,630 per metric ton. Chinese 304 stainless coil ticked up a tiny bit to $2,679 per metric ton. Chinese 316 stainless coil also ticked up a bit to around $4,248 per metric ton.
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