Stainless MMI: Strike continues at ATI; nickel price plunges then stabilizes

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The Stainless Monthly Metals Index (MMI) dropped by 10.4% for this month’s reading, as the ATI strike continues into its third week.

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ATI strike continues

strike

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The United Steelworkers union’s strike at nine Allegheny Technologies Inc. (ATI) facilities continues into its third week this week.

As we noted late last month, the union announced the strike at nine facilities, citing “unfair labor practices.”

“We are willing to meet with management all day, every day, but ATI needs to engage with us to resolve the outstanding issues,” USW International Vice President David McCall said in a prepared statement March 29. “We will continue to bargain in good faith, and we strongly urge ATI to do start doing the same.

“Through generations of hard work and dedication, Steelworkers at ATI have earned and deserve the security of a union contract. We cannot allow the company to use the global pandemic as an excuse to reverse decades of collective bargaining progress.”

Meanwhile, ATI expressed disappointment in the move.

“Last night, ATI further improved our proposal in hopes of averting a work stoppage,” ATI spokesperson Natalie Gillespie wrote in an emailed statement. “With such a generous offer on the table — including 9% wage increases and premium-free health care — we are disappointed for this action, especially at such an economically challenging time for ATI.”

The Tribune-Review reported ATI has called for the union to allow workers to vote on the company’s contract offer.

Late last year, ATI announced plans to exit the standard stainless steel sheet market by mid-2021. As such, stainless buyers already had to develop alternative plans if they were ATI customers. The current ATI strike presents another point of disruption for buyers.

Katie Benchina Olsen, MetalMiner senior stainless analyst, indicated earlier this month that lost production from the strike would be difficult to fill.

“Neither NAS nor Outokumpu have the capacity to undertake filling in for the ATI strike,” she said. “My opinion is that we may see some manufacturers run out of metal or have to substitute with another stainless alloy or maybe even another metal.”

Nickel ups and downs

The nickel price surged to a seven-year high back in late February. The LME three-month price closed Feb. 22 at $19,722 per metric ton.

In early March, MetalMiner’s Stuart Burns wondered if the nickel price was due for a decline.

The answer, of course, proved to be “yes.”

Shortly thereafter, the nickel price came crashing down. Two weeks after reaching a seven-year high, the three-month price had fallen to $16,145 per metric ton, a drop of 18%.

The price took a dive on news of Tsingshan supply deals, indicating plentiful supply and depressing the price.

“Nickel’s narrative has largely been predicated on a shortage of battery-grade metal driven by EV demand,” Burns wrote last month.

“However, Tsingshan’s supply contract and capacity announcements suggest there will be sufficient supply. As a result, the nickel market reflected a sharp rethink of the deficit view.”

On the whole, however, nickel demand remains strong for its use in stainless steel and electric vehicle batteries.

Since the early March plunge, the nickel price has stabilized.

The LME three-month nickel price traded in a relatively narrow band throughout March before breaking through in April. Since April 1, the LME three-month price is up 3.9%.

Ferrochrome average

Buyers utilizing Cleveland-Cliffs/AK Steel will notice that the ferrochrome average for its April surcharge is based on $1.56/lb instead of the $1.1750/lb of Outokumpu and NAS.

The other mills implemented a one-month lag last year when the chrome negotiations were delayed. However, AK remained with the adjustment at the beginning of each quarter.

This means that the $0.0829/lb increase for the 304 chrome component will be seen in NAS, ATI and Outokumpu’s May surcharge.

NAS price changes

NAS announced several price changes effective with shipments from April 1, 2021:

    • Bright annealed (BA) priced using 2B price build plus $0.05/lb BA extra
    • Tread plate increase of $o.06/lb
    • Hot rolled anneal and pickle (HRAP)
      • ≥3/16” thick: increase of $0.03/lb
      • <3/16” thick: increase of $0.06/lb

In addition, NAS announced a double reduction at Z-mill extra of $0.05/lb and a single sequence cast heat extra of $0.07/lb.

Elsewhere, NAS increased its April fuel surcharge to 27% for stainless flat and long products.

“The surcharge rate is considered the maximum level for April and will be reviewed monthly,” NAS said.

Actual metals prices and trends

The 304 Allegheny Ludlum stainless surcharge dropped two cents over the month to $1.23 per pound. Meanwhile, the 316 surcharge also fell two cents to $0.90 per pound.

The Chinese stainless 316 cold rolled coil price was flat at $3,630 per metric ton. The 304 coil price fell 3.8% month over month to $2,539 per metric ton.

The LME three-month nickel price fell 13.4% to $16,150 per metric ton as of April 1.

The Chinese primary nickel price fell 13.9% to $18,712 per metric ton. The Indian primary nickel price fell 12.5% to $16.17 per kilogram.

Find more insight on MetalMiner’s LinkedIn.

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