Stainless MMI: Nickel Prices Surge as Stainless Surcharges Fall

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Source: Maksym Yemelyanov

The Stainless Steel Monthly Metals Index (MMI) bounced back this month, rising two points to 69 after last month’s two-point drop.

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Movements of individual prices within the index were mixed.

LME nickel prices increased the most among price points in the index, up by 6.8% month over month. After June’s trend toward higher prices, the price dropped around July 1, then surged again and is essentially moving sideways at this time.

Source: MetalMiner analysis of the London Metal Exchange (LME) and FastMarkets

In June, rainy weather brought widespread flooding to Indonesia’s nickel hub on Sulawesi island. Estimates indicate a production shortfall of between 50,000-100,000 tons of nickel ore as a result, according to Indonesia’s Nickel Miners Association in press reports.

According to the latest numbers published by the International Nickel Study Group (INSG), as reported by Reuters, the supply deficit for the refined nickel market came in at 27,000 tons for the first four months of the year, down from 59,000 tons during the same period in 2018. The most recent INSG projections indicate the supply gap will close during the second half of 2019.

Domestic Stainless Steel Market

Source: MetalMiner data from MetalMiner IndX(™)

Stainless 304 and 316 NAS surcharges fell again this month, now similar to surcharge rates at the start of the year. Surcharges are still above 2016 lows and are still moving within the sideways band that formed in December 2016. Should the supply gap close as projected, this may cause surcharges to fall even further.

What This Means for Industrial Buyers

Stainless price performance was mixed this month, as primary nickel prices rose while stainless surcharges dropped once again.

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Buying organizations will want to read more about our longer-term steel price trends with our Annual Outlook.

Actual Stainless Steel Prices and Trends

The U.S. 316 and 304 Allegheny Ludlum stainless surcharges dropped again this month — by 6% and 9%, respectively, to $0.83/pound and $0.56/pound.

Meanwhile, nickel prices were up quite a bit. The LME primary 3-month price increased by 6.8% to $12,710/mt. China’s primary nickel price increased by 4.27% to $14,658/mt. India’s primary nickel price increased by 4.3% to $13/kilogram.

Chinese nonferrous FeCr lumps decreased by 3% to $1,595/mt and FeMo lumps dropped by 2.3% to $17,548/mt.

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The remaining prices in the index generally increased mildly, between 0.6% and 1.9% (with the exception of Chinese 316 stainless scrap, which declined by 0.4% to $1,908/mt).

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