The Stainless Steel Monthly Metals Index (MMI) fell again this month. The slide of six points moved the index to 72 from the previous 78 reading. Lower nickel prices led the fall, while domestic stainless steel surcharges also fell.
The drop in the index comes a result of a MetalMiner adjustment to a couple of metals that make up the Stainless MMI. The adjustment is not due to a dramatic fall in nickel or stainless prices.
LME nickel prices traded lower in August and have continued to drop so far in September.
Nickel prices seemed more volatile in August than for the whole of 2018. Current prices have returned to January 2018 levels. Despite the recent downtrend, nickel prices have remained in an uptrend since last summer (June-July), when prices started to increase sharply.
A fundamental tightness in the nickel market could also add more support to nickel prices. Combined nickel stocks have fallen by 45% since the beginning of 2016. LME nickel stocks have fallen for 11 consecutive months, and currently stand at 248,328 tons (back to 2013 levels).
SHFE stocks have fallen by 82% since 2016, when SHFE stocks reached 110,000 tons. Current SHFE stock levels stand at 18,844 tons.
Domestic Stainless Steel Market
Domestic stainless steel surcharges fell for the second time since the beginning of the year. The 316/316L-coil NAS surcharge fell to $0.99/pound, while the 304/304L decreased to $0.70/pound.
The pace of stainless steel surcharge increases seems to have slowed this month, along with steel (and stainless steel) price increases. However, stainless steel surcharges remain in a clear uptrend and appear well above 2015-2017 lows.
What This Means for Industrial Buyers
Stainless steel price momentum slowed down slightly this past month. However, both steel and nickel remain in a bull market.
Therefore, buying organizations may want to follow the market closely for opportunities to buy on the dips. To understand how to adapt buying strategies to your specific needs on a monthly basis, request a free trial of our Monthly Outlook now.
Actual Stainless Steel Prices and Trends
Both Chinese 304 stainless steel coil fell by 1%, while Chinese 316 stainless steel coil prices increased this month by 3.02%.
Chinese Ferrochrome prices decreased this month by 4.25%, falling to $1,848/mt. Nickel prices also fell 9.56% to $12,570/mt.