Stainless MMI: Demand, prices to increase in 2021; ATI exits standard stainless sheet product market

The Stainless Monthly Metals Index (MMI) increased by 6.0% this month, as ATI issued a major announcement and China ups its stainless imports from Indonesia.
January 2021 Stainless MMI chart

ATI exits stainless steel commodity market products

Allegheny Technologies Incorporated (ATI) announced Dec. 2 that the company would exit the standard stainless sheet product market. The move reduces availability of standard 36″ and 48″ wide material.
The announcement comes as part of the company’s new business strategy. ATI will focus on investing in enhanced capabilities on higher-margin products, primarily in the aerospace and defense industries.
ATI’s departure from the stainless steel commodity portion of the market also leaves a gap for 201 series materials, which is why 201 base prices will see bigger increases than 300 or 430 series materials. Both NAS and Outokumpu announced a 201 base price increase amounting to approximately $0.0500/lb.
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China increases Indonesia imports

Meanwhile, according to data reported by the World Bureau of Metal Statistics (WBMS), Indonesia increased its stainless steel product exports by 23.1% from 2019 to 2020.
Slab exports increased from 249,600 metric tons to 973,800 metric tons. Meanwhile, coil exports decreased from 1.5 million metric tons to 1.1 million metric tons.
During 2019, Taiwan finished as the largest consumer of Indonesian stainless steel exports, followed by China.

However, this trend changed in 2020. Last year, China increased its intake of Indonesian stainless steel exports by 169.9%. This meant China received 45.9% of all Indonesian exports, totaling approximately 1.2 million metric tons in 2020.
This trend might carry into 2021. China’s stainless steel demand growth is projected to accelerate as part of the country’s 14th five-year economic plan.

Base prices, surcharges rise

Stainless flat rolled base prices increased in January due to rising demand and a reduction in capacity.
Base prices will rise approximately $0.0350/lb for 304 and $0.0250/lb for 430. January alloy surcharges for 304 will be $0.7808/lb, an increase of $0.0725/lb compared to December.
Stainless steel demand has remained strong over the past few months. Mill sales have increased, despite not operating at full capacity. Rather, they are running with long lead times.
This has led to declining inventory levels across the U.S. stainless steel market following several months of destocking in the distribution sector, as well as at manufacturers’ warehouses.

Actual metals prices and trends

The Allegheny Ludlum 316 stainless surcharge increased 8.2% month over month to $1.06/pound. The 304 surcharge rose 11.0% to $0.81/pound.
LME primary three-month nickel increased 1.3% to $16,607/mt.
Chinese 316 cold-rolled coil increased to $3,358.43/mt. Similarly, Chinese 304 cold-rolled coil rose to $2,422.09/mt.
Chinese primary nickel increased 9.0% to $20,026.77/mt. Indian primary nickel rose 6.9% to $17.36/kilogram.
FeCr lumps increased 1.9% to $1,609.57/mt.
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