Stainless MMI: Stainless producers announce base price hikes

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The Stainless Monthly Metals Index (MMI) remained flat for this month’s reading.

September 2021 Stainless MMI chart

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Base price and surcharge increase

Both NAS and Outokumpu announced price increases effective Sept. 1.

Outokumpu increased base prices by reducing the discount by one point for all 200 series, 301, 304, 304L, 316L and 430. All other 300 series alloys will see increases by virtue of discount reductions by three points. Outokumpu raised all of its other 400 series alloys by reducing the discount by four points.

In addition to base price increases, Outokumpu increased its width extra for under 48″ to $0.12/lb and added a $0.15/lb gauge extra for 301 18 gauge and lighter. It also increased cut-to-length charges.

NAS increased its base price by reducing the functional discount by one point for 304, 304L and 316L. All other alloys — except for automotive ferritics — will be increased by reducing the discount by two points. Non-430 ferritics will be increased by $0.08/lb, which means these alloys have increased $0.27/lb in 2021.

NAS also increased its 201 and 301 adder for 20 gauge and lighter to $0.15/lb.

Alloy surcharges are increasing in September. NAS’ September alloy surcharge for 304 is $1.0679/lb, an increase of $0.0380/lb compared to August.

Nickel SHFE price hits record high

While LME nickel prices retraced after hitting record highs in February 2021, SHFE prices reached their highest on record Aug. 30.

A trader based in China told Reuters that the local market is short of physical metal. Traders are scrambling to cover or get hold of units, which is pushing SHFE nickel prices up.

Additionally, nickel prices continue to increase as domestic stainless steel output declined in August and is expected to remain constrained through November. Some regions are implementing electricity curtailment policies and others are restricting total output from mills.

According to SMM, China’s total output of stainless steel in 2020 reached about 29.87 million metric tons. Total output from January to August 2021 reached 22.55 million metric tons. As such, in order for 2021 total stainless steel output to be lower than 2020, the total output from September to December cannot exceed 7.35 million metric tons. This would mean an average monthly output from September to December of approximately 1.84 million metric tons, which SMM estimates will mean the overall operating rate will drop to 60%.

Actual metals prices and trends

The Allegheny Ludlum 304 stainless surcharge ticked up by 3.7% month over month to $1.11 per pound this month. Meanwhile, the Allegheny Ludlum 316 surcharge surged to $1.62 per pound.

Chinese 316 cold rolled coil decreased 1.4% to $4,350 per metric ton as of Sept. 1. Meanwhile, 304 cold rolled coil dropped by 2.3% to $3,282 per metric ton. Chinese primary nickel surged by 2.5% to $23,025 per metric ton.

LME three-month nickel declined 2.1% to $19,468 per metric ton.

Indian primary nickel went down by 2.2% to $19.60 per kilogram.

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