Monthly Stainless Price Index Flat – But Nickel Could Still Rise Without Warning

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The monthly Stainless MMI® registered a value of 101 in August, steady with July’s value.

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The 3-month price of nickel on the LME closed the month of July at $18,800 per metric ton. Nickel is the leader among industrial metals this year as it was the first to turn upward this year. Now, nickel is consolidating after reaching a 2-year high in May, while industrial metal prices, overall, are finally trying to catch up with it.

Nickel LME Price consolidating

LME Nickel Price consolidating

The move is just a normal consolidation phase. Why?

Nickel is experiencing low volatility and finding support near $18,000 per ton. This is a natural price behavior as investors that bought nickel at the beginning of the year are now selling and taking the gains. The low volume and low volatility during these months is a good sign for nickel and if it manages to break into new ground, chances are that we’ll see it continue to move higher. In fact, the longer the consolidation, the bigger the upward movement will likely be.

Stainless_Chart_August-2014_FNL

What This Means For Metal Buyers

There is not much to think about with nickel. With a strong fundamental story behind it and the technical picture still looking bullish, there is no time for guesses. Buyers should be hedged in case this base metal keeps moving its way up.

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The price of Chinese primary nickel rose 1.5 percent to settle at $21,025 per metric ton. The Allegheny Ludlum 304 stainless surcharge rose 0.7 percent to $0.90 per pound after falling the previous month. Finishing at $18,760 per metric ton the nickel spot price saw a 0.3 percent shift lower on the LME for the month.

Allegheny Ludlum 316 stainless surcharge prices fell 2.3 percent to $1.28 per pound after rising the previous month. After rising the previous month, primary 3-month nickel prices dropped 0.1 percent on the LME to $18,775 per metric ton.

At a price of $1,344 per metric ton, Chinese ferro-chrome did not budge the entire month. Prices for Chinese ferro-moly remained constant this past month, holding at around $23,487 per metric ton. The price of Chinese 304 stainless steel scrap held steady around $2,656 per metric ton last month. Chinese 316 stainless steel scrap traded sideways last month, staying around $2,608 per metric ton. Chinese 304 stainless coil held pat last month at $2,656 per metric ton. Hovering around $4,211 per metric ton for the month, Chinese 316 stainless coil remained unchanged.

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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