The monthly Stainless MMI® registered a value of 95 in October, a decrease of 5.9% from 101 in September.
Wow! Almost 6% drop this month! So what is wrong with Nickel? Actually…nothing.
Prices don’t move up in a straight line. They move in zig-zag. After surging 50% this year, it’s not surprising that nickel corrected in September, especially considering that every single commodity got hit by a strong US Dollar.
Nickel is still up this year by almost 20%, while most metals are flat or down for the year (with the exception of aluminum and zinc). Despite the recent decrease, volume traded on the LME is telling us that there hasn’t been significant selling yet. This means that nickel could soon bounce back up after selling is exhausted.
Fundamentals still look positive, although, like always subject to opinion. Indonesia’s ban remains in place. China managed to increase supplies from other sources, especially from Philippines. However, this new production might not be able to fill the gap left by the Indonesian ban, moving the market into deficit over time.
What This Means For Metal Buyers
This correction is not reason enough to turn bearish on nickel. Nickel has the potential to move its way back up. However, this potential will be limited as long as the commodities market remains down.
On the LME, the nickel 3-month price closed the month at $16,595 per metric ton after dropping 11.8%. Following a 11.6% decline, the nickel spot price reached $16,500 per metric ton on the LME. Last month, the Allegheny Ludlum 316 stainless surcharge dropped 1.1% to $1.25 per pound.
At a price of $1,352 per metric ton, Chinese ferro-chrome did not budge the entire month. Hovering around $23,621 per metric ton for the month, Chinese ferro-moly remained unchanged. Last month was consistent for the price of Chinese primary nickel, which did not move from $21,023 per metric ton. Last month was consistent for Chinese 304 stainless steel scrap, which did not move from $2,672 per metric ton. Chinese 316 stainless steel scrap held pat last month at $2,623 per metric ton. Chinese 304 stainless coil traded sideways last month, staying around $2,672 per metric ton. Chinese 316 stainless coil experienced a flat month, staying around $4,235 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.