The Stainless Steel Monthly Metals Index (MMI) dropped two points, bringing the index value to 66 points.
The drop came as a result of lower LME nickel prices, while U.S. stainless steel surcharges held steady this month.
LME nickel prices traded lower in November, continuing the six-month downtrend that started back in June 2018.
LME nickel prices started to rise slightly at the end of November, and have risen so far this month. Current trading volumes appear weaker, which usually supports a downtrend.
Nickel Global Tightness
Forecasts suggest nickel will see increased availability in 2019.
Indonesia plans to increase capacity further, adding to nickel supply. Moreover, U.S.-China trade tensions over steel and stainless steel have driven LME nickel prices lower.
Despite the expectation of a nickel supply increase, current stock numbers do not indicate that yet. Nickel stocks at LME warehouses sit at 215,000 tons, 40% lower than at the beginning of 2018.
In December, Indonesia granted permission for two commodity companies to restart exports of nickel ore. In August, the mining ministry revoked export permits for around 4,222,119 tons of nickel ore shipments from PT Surya Saga Utama, PT Modern Cahaya Makmur and PT Integra Mining Nusantara, as they were not showing any smelter development.
Brazilian miner Vale SA, the world’s top nickel producer, plans to invest $500 million in its New Caledonia nickel mine, reflecting the recent boost in electric vehicle (EV) sales.
Miner BHP received approval from the Australian government to develop a nickel mine that would primarily feed its Nickel West battery chemicals business. The Venus deposit is one of the most relevant nickel deposits for the company, as it is looking to produce nickel sulphate (primarily used for electric vehicle batteries).
Domestic Stainless Steel Market
Domestic stainless steel surcharges fell again. This is the fifth consecutive drop in stainless steel surcharges this year.
The 316/316L-coil NAS surcharge fell to $0.87/pound, while the 304/304L surcharge fell to $0.60/pound.
The stainless steel surcharge has started a short-term downtrend, driven by the general slowdown in the steel and stainless steel markets.
However, stainless steel surcharges still remain well above 2015/2016 lows.
What This Means for Industrial Buyers
Stainless steel price momentum slowed down again this month, similar to carbon steel.
Nickel prices also appear weaker, following slower momentum in commodities markets.
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
Chinese 304 stainless steel coil decreased by 2.07%, while Chinese 316 stainless steel coil prices fell this month by 3.34%.
Meanwhile, Chinese Ferrochrome prices fell by 0.25%, down to $1,852/mt. FerroMolybdenum lumps prices fell 8.6%, moving to $18,739/mt.
Nickel prices fell by 3.38% to $11,280/mt.