Against the backdrop of the nickel export ban in Indonesia, MetalMiner’s monthly Stainless MMI® dropped to a value of 78 in December, a decrease of 4.9 percent from 82 in November.
Nickel prices fell significantly, after rising the previous month, driving the stainless index down. The 3-month price of nickel dropped 7.5 percent on the LME, while transactional prices of Chinese and Indian primary nickel fell by 6.5 and 7 percent respectively.
There are several analysts out there who feel nickel prices will turn around once the Indonesians kick their export ban into effect in January 2014. Current evidence points to the ban remaining intact, which could make the global nickel oversupply situation do a one-eighty.
However, nickel prices remain in a long-term downtrend since prices topped in the first quarter of 2011. What’s our nickel outlook? Let’s base it on a more technical analysis, shall we?
Nickel Price Technical Analysis
As with other industrial metals, prices have kept dropping and new highs always seem lower than previous ones. This is an important concept for metal buyers, since it is risky to place forward buys to meet long-term requirements under a major falling trend.
The 3-month price of nickel on the LME fell this month from $14,570 to $13,475 per metric ton. However, this significant drop seems to be losing selling pressure since prices are reaching a supported area.
MetalMiner’s Nickel, Stainless Price Outlook
We wouldn’t be surprised to see nickel prices gain some support during the month of December. However, in the near term into 2014, nothing indicates a breakdown in the major downtrend, which means that prices will likely remain in low levels. In addition, despite talk of export bans, both stainless and nickel markets still remain in an oversupply situation.
Key Price Drivers of the Stainless Index
In addition to the hefty LME price drops mentioned above, Chinese primary nickel prices fell 6.5 percent to $15,358 per metric ton after rising the previous month.
The Allegheny Ludlum 316 stainless surcharge rose 4.1 percent to $0.91 per pound after falling the previous month. The Allegheny Ludlum 304 stainless surcharge reached $0.66 per pound after a 3.7 percent increase.
Last month was consistent for Chinese ferro-chrome, which did not move from $1,362 per metric ton. Chinese ferro-moly traded sideways last month, staying around $23,793 per metric ton. At a price of $2,691 per metric ton, Chinese 304 stainless steel scrap did not budge the entire month. The price of Chinese 316 stainless steel scrap held steady around $2,642 per metric ton last month. Chinese 304 stainless coil held pat last month at $2,691 per metric ton. Hovering around $4,266 per metric ton for the month, Chinese 316 stainless coil remained unchanged.
The Stainless MMI® collects and weights 14 global stainless steel and raw material price points to provide a unique view into stainless steel price trends over a 30-day period. For more information on the Stainless MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.