Stainless MMI: Nickel surged to 11-year high 

The Stainless Monthly Metals Index (MMI) rose by 7.46% from January to February.

Nickel prices surged to an 11-year high last month, due to plummeting LME warehouse inventories. Prices retraced in late January after a minor sell off, but managed to rebound. As prices climb toward recent highs, they may either breakout to new levels. Alternatively, they can reject those levels and fall back within the current trading range.
U.S. producers object to A&T Stainless petitions 
Last month, MetalMiner reported A&T Stainless, the joint venture between Allegheny Technologies (ATI) and China’s Tsingshan, filed for a Section 232 exclusion for the import of Indonesian “clean” hot band sourced from the JV’s Tsingshan plant. Following the filing, U.S. producers pushed back.
U.S. producers filed objections balking at the claim that “clean” hot band (free from residual elements) was ever necessary. Domestic producers reject the argument that the DRAP line required this “clean” material.  Prior U.S. slab supply never had such a requirement.  Outokumpu and Cleveland Cliffs also argue that the Indonesian hot band contains a larger carbon footprint than U.S. material. Indonesian band uses nickel pig iron instead of stainless scrap. The exemption decision will likely come late in the first quarter after a review of the A&T Stainless’ surrebuttal.
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Stainless producers limit allocation products
Meanwhile, North American Stainless (NAS), Outokumpu (OTK) and Cleveland Cliffs (Cliffs) continue to specify the alloys and the products accepted within an allocation. 201, 301, 430 and 409, for example, remain restricted by mills as a percentage of the total allocation. Light gauges, special finishes and non-standard widths also have limits within the allocation structure. Furthermore, the allocations occur monthly so service centers and end users must fill their annual allocation in equal monthly “buckets.” NAS started to accept orders for April delivery.
Nickel price surge underpinned by low inventories
Nickel prices spiked in January to an 11-year high. By Jan. 21, LME warehouse stocks dwindled to 94,830 metric tons and primary three month nickel prices hit $23,720/mt. Prices managed to rebound during the final days of the month, but since resumed their ascent as prices chase the late-January high. In spite of the rebound, LME warehouse inventories continued to decline. Inventories now sit beneath the 90,000 metric ton mark as of the early days of February, a low not seen since 2019.
The narrowing of warehouse inventories come as nickel sees strong demand from both the stainless and emerging electric vehicle (EV) sectors. While the stainless steel sector will likely cool throughout the year, as noted by MetalMiner’s own Stuart Burns, nickel’s usage in batteries that power EVs will likely accelerate alongside the continued growth of that sector. Global electric vehicle sales more than doubled in 2021 from the year prior. According to data from Rho Motion, electric vehicles sales reached beyond 6.36 million in 2021 as compared to 3.1 million in 2020. China alone represented roughly half of last year’s sales.
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In spite of the recent squeeze, prices nonetheless remain far beneath the 2007 surge. LME nickel prices reached $50,000 per ton in 2007, as LME warehouse inventories dropped below 5,000 tons. While current nickel prices remain squarely within an overall uptrend, the price remains well off the 2007 peak.
Actual metals prices and trends
The Allegheny Ludlum 304 stainless surcharge rose by 2.62% to $1.27 per pound as of Feb. 1. Meanwhile, the Allegheny Ludlum 316 surcharge rose by 2.85% to $1.80 per pound.
Chinese 316 cold rolled coil increased slightly by 1.92% to $4,315 per metric ton. Similarly, 304 cold rolled coil rose by 2.36% to $2,776 per metric ton. Chinese primary nickel jumped by 10.29% to $26,651 per metric ton.
LME three-month nickel rose by 7.71% to $22,350 per metric ton.
Indian primary nickel increased by 7.38% to $22.88 per kilogram.
 
 

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