Stainless MMI: Subindex Drops as Nickel Prices Show Weakness
The Stainless Steel Monthly Metals Index (MMI) declined this month, dropping by two index points to 69. A few of the prices in the basket registered fair declines, with nickel prices showing weakness.
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The LME primary nickel 3-month price decreased nearly 8% over the course of April. While prices showed strength early in the year into March, prices faltered and began to trade sideways.
More recently, however, prices appear on a declining trend, which could indicate a pricing correction, rather than a shift in trend.
However, with negative volume still high — as indicated on the weekly chart of LME nickel prices with trading volume shown along the bottom — the correction remains in progress.
China’s Economic Performance Matters for Prices
The present global economic outlook could be characterized as uncertain in the face of ongoing trade talks between the U.S. and China.
After much press early in the year over China’s slower rate of growth, with forecasts shifted downward at the start of the year, the FXI — an index of large-cap Chinese companies — surprised the market with a show of strength.
Chinese stimulus measures helped bolster the economy’s performance. Recently, however, the boost seemed to lose steam; meanwhile, the FXI uptrend waned.
The U.S. Economy Grew in Q1; Some Sectors Lagged Behind
Economic indicators continue to fluctuate into 2019, for both the U.S. and China.
For example, while Q1 growth appeared stronger than expected in the U.S., construction spending and new home starts showed weakness in March, while new auto sales slowed this year. China’s performance remains mixed, with auto sales also weak there.
Domestic Stainless Steel Market
This month, the 304/304L-Coil and 316/316L-Coil NAS Surcharges dropped to $0.63 and $0.92 per pound, respectively, from $0.64/pound and $0.93/pound at the beginning of April.
What This Means for Industrial Buyers
Downward-trending prices provide good news for industrial buyers, with stainless steel prices showing weakness this month overall.
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Actual Stainless Steel Prices and Trends
Stainless steel prices showed weakness, with price declines hitting the subindex.
In particular, LME nickel prices fell 7.9% month over month to $12,210 mt. Primary nickel prices in China and India fell by 3.5% and 5.8%, respectively, with Chinese primary nickel averaging $15,412/mt and Indian primary nickel averaging $12.49 per kilogram.
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