Monthly Stainless MMI® Falls as Nickel Prices Find a Floor

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MetalMiner’s monthly Stainless MMI® registered a value of 87 in December, a decrease of 5.4% from 92 in November.

*Note: Effective 12/1/14, MetalMiner updated some of the source data from China used to calculate this index. Therefore the December index reading appears a little more volatile when compared to the November reading. Any movements in the January reading will once again reflect only market price changes as opposed to market and source data prices changes.

Stainless_Chart_December-2014_FNL

After nickel prices fell sharply in September, nickel finally bounced back up last month as prices were oversold. We commented on this in our last report when we pointed out: “Nickel fell again in October, but the drop wasn’t as significant as September’s and recent price movements are telling us that prices might be finding a floor.”

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Nickel on the LME is up by 6% since the beginning of November while commodities keep falling sharply. (Meanwhile, stainless bar, coil, sheets and scrap along with surcharges on our Stainless MMI® have indeed declined.) Fundamentals are set to tighten and, in theory, this should fuel buying interest eventually. The question is: are nickel fundamentals strong enough to significantly push the metal up in 2015 while investors stay away from commodities?

We doubt it.

The metal has potential and remains one of the strongest bets among industrial metals. However, history shows that the overall market contributes more than 60% of the individual metal price movements.

In November, the entire commodity complex fell as crude oil slumped and the dollar continued to rise. These developments are surely keeping nickel from going higher and we expect nickel’s potential to be limited until the picture changes for commodities.

What This Means For Metal Buyers

Nickel prices might have found a floor. The bear market for nickel might be over, but it will be hard to see nickel significantly rising in 2015 while commodities keep falling. This is a good time for buyers to watch for new clues as markets change.

This Month’s Key Price Drivers

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

Chinese 304 stainless steel scrap finished the month at $1,552 per metric ton. Chinese ferro-moly finished the month at $14,704 per metric ton. Chinese 316 stainless steel scrap prices dropped this month to $2,128 per metric ton. The price of Chinese primary nickel declined over the month to $18,035 per metric ton. The price of Chinese 316 stainless coil fell 8.8% to $3,851 per metric ton. The Allegheny Ludlum 316 stainless surcharge fell 8.4% over the past month to $0.97 per pound.

Chinese ferro-chrome prices rose to $1,795 per metric ton. After rising 6.7%, Chinese 304 stainless coil finished the month at $2,843 per metric ton. The spot price of nickel rose 1.7% on the LME to settle at $16,080 per metric ton. The nickel 3-month price inched up 1.6% on the LME to $16,150 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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