Stainless MMI Over 100; Nickel Takes An LME Breather Before Its Next Move

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The monthly Stainless MMI® registered a value of 103 in June, an increase of 6.2 percent from 97 in May.

Stainless/Nickel MMI June 2014

The 3-month price of nickel on the LME closed the month of May at $19,280 per metric ton. Nickel reached a new 2-year high last month while industrial metal prices, overall, remain at low levels. By this point, nickel/stainless buyers should have taken their risk off the table as we recommended two months ago.

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After four months skyrocketing without looking back, nickel is finally taking a breather before making the next move. Will it go higher?

3M LME Nickel since 2013

3M LME Nickel since 2013

Despite the poor performance of the industrial metals sector, nickel could keep going higher as it has strong fundamentals that have been already reflected in the price. Indeed, the fact that nickel managed to record a new 2-year high is a long-term bullish signal as we commented last month.

What This Mean For Metal Buyers

Nickel is taking a break after the huge run it has experienced this year. Chances are that nickel keeps reaching new highs after this pause. In periods when there is price risk, buyers should hedge. Among all the metals we cover, nickel and palladium are the only metals that we recommend to hedge this year.

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The Allegheny Ludlum 304 stainless surcharge rose 14.1 percent over the past month to $0.90 per pound, the second straight month of gains. At $1.29 per pound, the Allegheny Ludlum 316 stainless surcharge increased 11.2 percent. For the second month in a row, the price of Chinese primary nickel increased, rising 6.7 percent over the past month to $21,292 per metric ton. The nickel spot price rose 6.2 percent on the LME over the past month to $19,300 per metric ton. At $19,275 per metric ton, the 3-month price of nickel finished the month on the LME 5.6 percent higher. This was the second straight month of declines.

Last month was consistent for Chinese ferro-chrome, which did not move from $1,328 per metric ton. Prices for Chinese ferro-moly remained constant this past month, holding at around $23,195 per metric ton. Chinese 304 stainless steel scrap experienced a flat month, staying around $2,623 per metric ton. The price of Chinese 316 stainless steel scrap held steady around $2,575 per metric ton last month. Chinese 304 stainless coil held pat last month at $2,623 per metric ton. Chinese 316 stainless coil traded sideways last month, staying around $4,159 per metric ton.

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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