The Stainless Steel Monthly Metals Index (MMI) traded sideways in October. The current index stands at 72 points, back at January 2018 levels.
The sideways trend was created by a less volatile nickel price and lower domestic stainless steel surcharges, while stainless steel prices overseas inched higher.
As MetalMiner highlighted last month, the drop in the index comes as 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 September, but then switched to a sideways trend in October.
Nickel prices were more volatile in September, showing two sharp movements (down and up) at the beginning and the end of the month. Despite the recent downtrend, nickel prices have remained in an uptrend since last summer (June-July), when prices started to increase sharply.
Global Nickel Tightness
The Philippines, the world’s top supplier of nickel ore, will start limiting the land mines can develop following new environmental rules.
Under these new rules, mines will have a 20-meter “buffer zone” or ban on metal extraction. Nickel miners will see production limits ranging from 50-100 hectares (123-400 acres).
President Rodrigo Duterte has advised miners to reforest areas where they operate to reduce environmental concerns. In addition, all small-scale activities in mountainous regions stopped after the Mangkhut typhoon.
According to government data, nickel ore output decreased by 10% in the first half of 2018 when compared to last year’s 9.43 million tons during the same time frame. The output drop came as a result of the suspension of 11 mines this year, which had zero output during this period.
Domestic Stainless Steel Market
Domestic stainless steel surcharges fell for the third time since the beginning of the year.
The 316/316L-coil NAS surcharge fell to $0.94/pound, while the 304/304L decreased to $0.65/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 still remain well above 2015-2017 lows.
What This Means for Industrial Buyers
Stainless steel price momentum slowed down slightly this month. Stainless steel’s slower momentum seems to go together with slower domestic steel price momentum. However, nickel prices still remain strong.
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 to our Monthly Outlook now.
Actual Stainless Steel Prices and Trends
Both Chinese 304 stainless steel coil increased by 0.85%, while the Chinese 316 stainless steel coil price increased this month by 0.88%.
Chinese Ferrochrome prices decreased this month by 0.35%, down to $1,841/mt.
Nickel prices also increased slightly this month, rising 0.23% to $12,600/mt.