The Raw Steels MMI (Monthly Metals Index) jumped another 1.3% this month, reaching 83 points in January.
Steel momentum seems to have recovered this month. All forms of steel prices in the U.S. increased sharply. Steel momentum typically begins during the middle of Q4, but the increase occurred later this past year. January’s numbers also look bullish.
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[caption id="attachment_89677" align="aligncenter" width="580"]
U.S. HRC and CRC prices. Source: MetalMiner data from MetalMiner IndX(™)[/caption]
In the U.S. market, January will prove to be a decisive month.
The U.S. Secretary of Commerce Wilbur Ross has until mid-January to conclude his Section 232 probes and release a report to the Trump administration, after which the president has 90 days to act.
Shredded Scrap
The long-term shredded scrap price uptrend appears to have turned into a short-term sideways trend. Despite steel price increases in December, January scrap prices decreased.
[caption id="attachment_89678" align="aligncenter" width="580"]
Source: MetalMiner data from MetalMiner IndX(™)[/caption]
Decreasing domestic scrap prices do not currently support steel prices. However, steel prices appear to be on a sustainable upward trend. Therefore, scrap prices could follow steel prices this month and continue their long-term uptrend.
Chinese Prices Still Strong
Chinese steel prices and U.S. prices usually tend to move similarly. Thus, when one reveals a strong upward or downward movement, the other could follow within that month.
Chinese prices were stronger than U.S. steel prices during November and December 2017. After the latest increase in U.S. steel prices, Chinese prices also continued rising.
[caption id="attachment_89679" align="aligncenter" width="580"]
Source: MetalMiner data from MetalMiner IndX(™)[/caption]
Chinese steel prices have found support from the curtailment campaign in the country. Therefore, steel prices could continue increasing. Chinese Q4 GDP data, expected to show strength, also support Chinese steel prices. Chinese GDP data has come in over annual growth targets for the country.
What This Means for Industrial Buyers
As steel price dynamics showed a strong upward momentum this month, buying organizations may want to understand price movements to decide when to buy some volume. Buying organizations will want to pay close attention to Chinese price trends, lead times and whether domestic mill price hikes stick.
Buying organizations who have concerns about the Section 232 outcome and its impact on the steel industry may want to take a free trial now to our Monthly Metal Buying Outlook. Our February Monthly Outlook will include a detailed analysis of the Section 232 outcome.
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Actual Raw Steel Prices and Trends
Category: Ferrous Metals
Stainless Steel MMI: LME Nickel Price Approaches $13K/MT
The Stainless Steel MMI (Monthly Metals Index) jumped six points this month, with a reading of 71. This reading ran higher than November’s (70), which then dropped to 65 for December before bouncing back for our January reading.
Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up
Skyrocketing LME nickel prices drove the Stainless Steel MMI. However, 304 and 316 Allegheny Ludlum surcharges fell slightly this month.
LME Nickel Makes Big Jump
As reported previously by MetalMiner, nickel price volatility has increased over the past few months.
Nickel prices jumped from the $10,600/metric ton level in October to almost breaching MetalMiner’s current $13,000/mt ceiling.
[caption id="attachment_89668" align="aligncenter" width="580"]
Source: MetalMiner analysis of FastMarkets[/caption]
Trading volume remains strong, aligned with the recent popularity of nickel in the base metals complex. Besides stainless steel, nickel’s popularity has increased due to usage in batteries and electric cars. Q4 brought more activity for metals that have a direct impact on electric cars.
Nickel macro-indicators may support this latest rally.
The nickel deficit will continue this year. The International Nickel Study Group (INSG) reported a wider nickel deficit again in 2017, now up to 9,700 tons. A nickel supply deficit may add support to the nickel bullish rally and could create additional upward movements this year.
Buying organizations may want to be aware of these movements to identify opportunities to buy on the dips.
Chinese Stainless Steel
As reported by the International Stainless Steel Forum (ISSF), global stainless steel production increased by 7.4% during the first nine months of 2017. China drove the gains, with an increase in production of 8.8%. Stainless steel prices decreased around 7% in East Asian ports.
[caption id="attachment_89669" align="aligncenter" width="580"]
Source: MetalMiner data from MetalMiner IndX(™)[/caption]
Chinese stainless steel coil prices increased slightly this month. Chinese prices remain higher than they were in Q2. However, there has not yet been a clear uptrend that signals prices may increase soon.
Domestic Stainless Steel Market
Despite the recovery in momentum of the Stainless MMI, NAS domestic stainless steel surcharges traded sideways this month. Despite trading flat, stainless steel surcharges remain well above last year’s lows (under $0.4/pound).
[caption id="attachment_89670" align="aligncenter" width="580"]
Source: MetalMiner data from MetalMiner IndX(™)[/caption]
What This Means for Industrial Buyers
Stainless steel momentum appears in recovery, similar to all the other forms of steel.
However, due to nickel’s high price volatility, buying organizations may want to follow the market closely for opportunities to buy on the dips.
To understand how to adapt buying strategies to your specific needs on a monthly basis, take a look at our Monthly Metal Buying Outlook or you can take a free trial now.
Free Sample Report: Our Annual Metal Buying Outlook
Actual Stainless Steel Prices and Trends
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