stainless steel price

The Stainless MMI continues its decline this month. Moreover, nickel prices continue to show weakness without any apparent bullish anticipation from market participants. As the entire industrial metals market sloped downward, nickel prices followed suit. Moreover, volumes remain lower than pre-LME shutdown levels, which will continue to foster slow price movement.

The Stainless Monthly Metals Index (MMI) dropped 9.55% from June to July.

 

Tsingshan Tycoon Caps Losses at $1 Billion After Nickel Crisis

According to a recent Bloomberg report, the man behind the historic March nickel squeeze walked away from the crisis with an estimated loss of $1 billion. To most, that figure sounds almost unimaginable. However, it’s a far cry from the more than $10 billion loss he faced when nickel prices surged past $100,000/mt. Instead, Xiang Guangda, owner of mining and steelmaking company Tsingshan Holding Group, managed to close out nearly all of his short positions almost four months later.

Guangda’s ability to withdraw with nearly all his assets intact and, for him, a manageable loss, was notably aided by a few big players. For instance, when nickel prices skyrocketed, the LME halted trading. That move allowed Guangda time to strike a deal with roughly ten banks and brokers attached to his short position. Perhaps even more crucially (and controversially), the LME canceled multiple transactions. This brought prices back to the previous day’s closing of just under $50,000. However, Guangda did not, in fact, begin closing his short positions when the exchange reopened. Instead, the deal he struck allowed him to hold off until prices dipped to more acceptable thresholds, capping his net losses and allowing him to remain very much a billionaire.

Know what to do when the market shifts. Related article: The Art of Timing Your Buy

Damage Far-Reaching for Nickel Prices, Could Extend Months if Not Years

While Guangda appears “in the clear,” the damage of the squeeze extended far beyond the actual events. For one, the LME’s reputation seems severely, and perhaps permanently, harmed. Of course, the exchange was caught between a rock and a hard place. That said, it did choose a side. And that will always leave the other side angry.

Understandably, the exchange felt incredible pressure amid the chaos. According to the LME’s chairman, Gay Huey Evans, “had the LME not taken these decisions, the effect on the nickel market would have been intensely damaging and felt throughout the nickel value chain investment community.” Although it’s been denied, speculation persists that Beijing may have influenced LME’s parent company, Hong Kong Exchanges and Clearing Limited.

As the LME’s chosen winner walks away, the losers remain furious. On the one hand, the exchange has found itself the target of numerous lawsuits and investigations. On the other hand, the crisis triggered a retreat from the LME due to distrust and risk aversion among market participants. Open interest across the metals has trended downward since March. Its nickel contract, though still functional, stands as the most substantially damaged, with trading volumes roughly half of what they were.

Beyond the LME, the wider nickel market continues to struggle to find a fair value for trade hedges. This is largely due to low volumes harming liquidity and widening spreads. As no CME contract exists, India’s MCX and China’s SHFE stand as the only viable alternatives. Both, however, are priced in non-freely convertible currencies. The SHFE appears as the obvious beneficiary, but not necessarily to a substantial degree. Instead, the market remains shaken. In MetalMiner’s opinion, the true fallout of the nickel crisis will likely extend months, if not years.

The best way to track monthly nickel prices is to sign up for MetalMiner’s monthly MMI reports which come direct to your inbox. 

 

NAS July Fuel Surcharge Rises to 51%

North American Steel’s fuel surcharge hit a new record in July as it climbed for the second consecutive month to 51% from 50% in June. The figure has more than doubled since May of 2021 amid record energy prices. The surcharge during the first seven months of 2022 now sits over 71% higher than what it was during the same period of 2021.

Fortunately, fuel prices are projected to see some relief in the near future. In fact, oil slid 2% last week to reach a 12-week low of just under $100 a barrel. That said, the only reason for this sudden drop is increased worries about a global recession. If that looming threat comes to fruition, there may be worse things to worry about than fuel surcharges.

See the impact on stainless steel prices. Check out MetalMiner’s stainless steel should cost models by scheduling a demo of the Insights platform.

 

Actual Metals Prices and Trends

  • The Allegheny Ludlum 304 stainless surcharge fell by 6.59% to $1.70 per pound as of July 1. Meanwhile, the Allegheny Ludlum 316 surcharge dropped 7.76% to $2.26 per pound.
  • Chinese primary nickel decreased by 18.8% to $27,236 per metric ton.
  • LME three-month nickel fell by 13.49% to $The 8,245 per metric ton.
  • Indian primary nickel increased by 14.72% to $8.63 per kilogram.

 

Last Month, MetalMiner reported that stainless steel cost had been holding strong amid high demand and increased production. However, we did identify some cracks in what might otherwise look like a solid recovery. As we transition from Q2 to Q3, some of those cracks have grown significantly.

stainless steel tanks

Low Demand in China Affecting Stainless Steel Cost

According to a recent report from the Shanghai Metals Market, prices are seeing downward pull due to low demand. Though mills are optimistic that Q3 will bring more orders, warrants remain down thus far. As indicated in the report, “In the spot market, the market is uncertain about when the dropping of stainless steel prices will come to an end. Traders mainly hold a pessimistic outlook for the recovery of consumption.”

“Pessimism” seems to be the word of the day when it comes to the Chinese economy and stainless steel cost. President Xi Jinping hasn’t been shy about using his government to spur growth. Even so, reports from organizations like Fortune think the stimulus plan remains too weak to save the ailing economy.

All in all, the company’s strict adherence to zero-COVID initiatives and the crippling lockdowns that result are just big a drag on the economy. Combine this with the worst property market decline on record, and it’s no surprise why steel costs are in danger. In the end, no amount of supply can make up for lack of buyers.

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Meanwhile, Steel Manufacturers in the EU are Talking Rebound

The European stainless steel market seems to be enjoying all the optimism China lacks. Recent estimates published in S&P Global are predicting a significant rebound in Q3 and Q4. Specifically, experts see the market rebounding almost to pre-COVID levels. This would be equivalent to around 1.2 million mt of finished longs for 2022. This represents a significant improvement over the 1.05 million mt produced in 2021.

Stainless Steel Costs

2022, Adobe Stock.

According to Emilio Giacomazzi, the sales director at Cogne Acciai Speciali in Italy, “We recorded a jump in demand for stainless steel after the COVID pandemic. Since May the market has been in a pause as stocks are high…but overall demand is good.” Though raw material prices (like everything else) are up, sectors like auto, oil, and aerospace are buttressing prices with demand.

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In the US, Oil and Gas Expansion Could Spur Steel Demand Further

The oil and gas industry remain one of the biggest consumers of stainless steel products. The production of pipes, pumps, tanks, and valves are all dependent on stainless steel. Just last week, Targa Resources signed a multi-billion-dollar deal to purchase operations in the Permian Basin. Lucid Energy previously owned the operation, but Targa committed to dramatically expand its regional presence. If this comes to fruition, the 600,000 acres will necessitate a lot of stainless-steel materials.

Though the public standoff between the Biden administration and oil and gas producers will likely continue, things are a bit different behind the scenes. Recently, industry execs sat down with Energy Secretary Jennifer Granholm in a meeting that both described as “productive.”

According to the American Petroleum Institute, the discussion sends “a positive signal to the market that the US is committed to long-term investment in a strong US refining industry and aligning policies to reflect that commitment.” If true, this could create a space where green energy and traditional energy can peacefully coexist.

When Will the Stainless Steel Rally End?

Many industry insiders have already published reports expecting steel prices to retreat over the coming months. It’s true that global prices, which have skyrocketed since October 2020, seem to have peaked. Supply is back, and demand seems shaky from country to country. Still, only time will tell if (and where) steel prices will find new support.

The metal marketplace moves fast. You can keep yourself properly informed with MetalMiner’s monthly MMI Report. Sign up here to begin receiving it completely FREE of charge. If you want a serious competitive edge in the metals industry, try a demo/tour of our revolutionary insights platform here.

Nickel prices are seeing a lot of attention due to an overall lack of liquidity on the LME contract. But what exactly does this mean? Moreover, what does it mean for buyers looking to mitigate price problems in the face of global supply problems?

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Understanding Price, Procurement, and Price Discovery

Every manufacturing CEO wants their procurement teams to do three things well. First, they want them to understand metal price trends from a short-term perspective. Second, they want them to know where prices will go from a long-term perspective. Finally, they want sound buying strategies based on that forecast.

Why do CEOs want this? Because at the end of the day, they need to better predict their margins if they’re going to keep shareholders happen. After all, there’s no better way to earn the ire of shareholders than poorly projecting profits.

Today, procurement departments with a substantial metal spend as a percentage of the cost of goods sold (COGS), forecast and manage profitability relying heavily on market fundamentals. In short: supply and demand.

Unfortunately, that methodology tends to provide a lot of “false positives. This is when a market based on limited supply indicates high prices, yet they remain low. You also have to contend with “false negatives.” Logically, this is when surplus inventory signals lower prices, but they remain stubbornly high.

The “new” way of forecasting metal prices provides more clarity and, more importantly, allows for more accurate buying decisions. This new methodology uses a mix of Artificial Intelligence (historical prices) and Technical Analysis (the study of price action as traded on exchanges).

A technology-driven approach like this helps buying organizations better understand where prices are most likely to go. In turn, this directs them on which kind of buying decisions to make. However, when an exchange-traded metal price loses its liquidity, the process known as “price discovery” breaks.

What Does Loss of Liquidity Actually Mean?

Simply put: liquidity refers to the number and volume of trades placed by active traders and market makers buying and selling a contract. Before March 8, the LME nickel contract typically had 10-12k contracts traded daily. Since then, LME nickel volumes have declined to around 2-3k contracts a day. This means that the LME has lost over 50% of its nickel liquidity ( a conservative estimate). As one might expect, this lost volume severely impacts price movement.

Let’s look at what happened to LME Nickel contracts after prices soared to over $100,000/mt:

Nickel price chart

As you can see, when liquidity disappears, industrial buying organizations purchasing nickel (or stainless steel containing nickel) have a harder time mitigating price risk.

Now, market makers and corporates are still trading at normal volumes on other contracts like aluminum, copper, and zinc. But in terms of nickel, SHFE contracts have not gained enough volume momentum to become significantly higher than the LME.

MetalMiner Insights tracks nickel and other contracts and lets buyers know when and how much they should buy.

Therefore, the future of the LME nickel contract will depend on how much volume/liquidity becomes openly available. If little to no volume returns, prices will move very slowly. In that case, the risk for the LME increases as low liquidity signals a lack of price discovery on the exchange.

Nickel Prices Will See Ramifications for Some Time

All of that said, buying organizations can still hedge against nickel using the SHFE contract. In fact, MetalMiner’s own trading desk has also traded JJN, a nickel-based ETF.

As previously reported by MetalMiner, the LME made a big mistake supporting Tsingshan, the nickel stainless producer that placed big bets on nickel prices falling. The company was over collateralized/margin called instantly once the LME nickel contract began to skyrocket.

Also, the LME retracted trades made off that price move. That means the ones left holding the bag made no profit, even though they were on the right side of the coin, so to speak. What should have happened was Tsingshan facing a margin call, losing, and paying out the profits the buyers deserved.

While some market observers may feel Tsingshan was “too big to fail,” the move by the LME has created a lot of distrust. Many market makers have fled the exchange altogether, ruining the possibility of a future influx of high volume/liquidity from retail.

Currently, it appears the LME nickel contract will suffer the balance of this year and possibly next year with low liquidity. You may remember the same thing happened with GME (Gamestop) back in 2021. When Robinhood halted trading of GME and AMC, it fostered a ton of distrust in the app.

Ask yourself: who would want to buy into the  Robinhood-Marvin Capital scandal of the metals market?

 You can keep yourself informed about all the latest metal news with MetalMiner’s monthly MMI Report. Sign up here to begin receiving it completely FREE of charge. If you want a serious competitive edge in the metals industry, try a demo/tour of our revolutionary insights platform here.

 

 

 

 

The Stainless Steel MMI indicates that prices are holding fast.

This, as cold-rolled stainless imports to the U.S. have averaged above 40,000 MT per month for several straight months. Meanwhile, U.S. flat-rolled stainless producers have run at full capacity for over a year now. Still, they continue to place premiums on products they simply don’t want to make.

For NAS and Outokumpu Calvert, that category includes basically anything that is not 304, 304L, 316L 2B (or 2D) base gauge or 48 & 60 wide standard mechanicals. On the other hand, A.K. is focused on the ferritic side for automotive and highly selective about alloys that contain any nickel.

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Trouble is Brewing Among Suppliers

There are few options for supplying the volumes needed to satisfy the ongoing demand. The extra steel either needs to come from Allegheny & Tsingshan Stainless J.V.’s DRAP (Direct Roll Anneal and Pickle Line), or from imports. However, it can’t come from both.

Market manipulation from Chinese steel producers has only increased in recent years.

Steel workers in China

With CRS import levels so high, the U.S. market simply doesn’t need the tons coming from A&T Stainless’ Midland facility. Indeed, back in March, all of A&T’s December / January 232 exemption petitions for Indonesian hot band were denied.

 

The company claimed they needed “clean” Indonesian band made from nickel pig iron that was free of residual elements. However, the Midland facility previously had no issues using scrap from Allegheny bands as well as other domestic and foreign suppliers.

Concerns over Chinese stainless steel supply

NAS, Outokumpu, and Cleveland-Cliffs vehemently opposed granting A&T Stainless Section 232 exemptions. One of the main concerns was ATI’s J.V. partner Tsingshan, a Chinese military-backed steel conglomerate. Specifically, there were issues with nickel pig iron instead of scrap. On top of that, Tsingshan’s speculative actions regarding nickel almost brought down the LME.

As previously covered, no U.S. or European-based mill would have been able to do what Tsingshan did. On May 3rd, Cris Fuentes, CEO of North American Stainless, issued the following statement to MetalMiner regarding Tsingshan’s actions:

“China’s continued anti-competitive practices and blatant market manipulation at the London Metal Exchange threaten to devastate the American steel industry and its workers, weaken our national security, and slow progress in addressing climate change. As countries across the world work to limit dirty Chinese steel, Beijing has only become more manipulative. The Chinese military-backed steel conglomerate Tsingshan has built sprawling new industrial complexes in Indonesia that can produce 27 times more steel than that country uses in an entire year. These egregious cross-border subsidies (sic) lead to a costly game of whack-a-mole as American regulators struggle to keep pace. Washington policymakers must flex American muscle with new and modernized protections for steel to counter the growing threats from abroad.”

Outokumpu declined to comment.

Comments from A&T Stainless

In a request for comment, Danielle Carlini General Manager, A&T Stainless said via email:

“We are disappointed the U.S. Department of Commerce denied A&T Stainless’s Section 232 tariff exclusion requests. We believe we meet the criteria for an exclusion and had looked forward to serving the needs of the market by bringing employees back to work through restarting idled assets. The Midland DRAP line that was idled in July 2020 will remain idled at this time. I cannot comment for Tsingshan.”

Key points:

  • Allegheny and Tsingshan Stainless have not received 232 exclusions though others have
  • Brokers, master distributors, and even a large service center (which has always had a mix of domestic and import sources) have received exclusions.
  • The stainless steel MMI indicates that prices remain strong.

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The Stainless Monthly Metals Index (MMI) jumped by 25.07% from March to April, as nickel prices remained elevated.

April 2022 Stainless MMI chart

Source: MetalMiner Insights

Nickel prices continue to trade slightly downward. However, nickel prices remain elevated from pre-invasion levels.

Volume flow fluctuated among exchanges in recent days due to distrust of the LME, while nickel prices began to trade within an increasingly narrow range. A sudden change in overall price direction remains unlikely in the coming weeks, however, as LME volumes remain limited.

Risk aversion, margin calls cause trading exodus

Nickel trading finally resumed last month following the historic short squeeze that saw nickel prices spike by more than 90% within hours.

In order to restore stability to the disorderly market, the LME retroactively canceled trades. The LME implemented new rules, including price limits, “to minimise the potential for future disorderly price moves.”

The volatility and overall market uncertainty, in part due to current geopolitical tensions, prompted exchanges and brokers to request higher down payments for certain commodities, known as margins. The new requirements hindered trading, even in regions not connected to Russia or Ukraine. Furthermore, the requirements fueled recent price swings as trades were unwound to avoid the cost of holding positions.

Between the difficulty to finance trade and compounding market risks, volumes upon the resumption of trading remained uncharacteristically low on both the LME and SHFE. Further, open interest on the LME hit a nine-year low, Reuters reported. Meanwhile, open interest on the SHFE nickel contract fell to its lowest level since 2015 as position holders retreated from the market.

What could low volume and liquidity mean for nickel prices?

Read more

The Stainless Monthly Metals Index (MMI) rose by 7.6% from February to March, as the skyrocketing nickel price prompted LME intervention Tuesday.

LME suspends trading due to short squeeze

Russia accounts for roughly 7% of global nickel supply. So, the possibility for supply disruptions, on the back of mounting sanctions from the West, adds pressure to the already tight market.

Prior to the invasion, nickel prices traded within a bullish pennant, a trading pattern that typically indicates the continuation of strong prices. The Russian invasion of Ukraine provided a catalyst, as prices spiked with tremendous bullish strength and confirmed the technical structure breakout.

nickel price

leszekglasner/Adobe Stock

By Monday, however, nickel prices at one point topped $100,000 per ton. As a result, the LME stepped in Tuesday, suspending nickel trading and canceling trades. The suspension will likely extend several days.

A short squeeze triggered the recent price spike. Short sellers, particularly China’s Tsingshan Holding Group, executed larger purchases in order to cover their short positions. The Tsingshan Holding group started to build a short position last year, according to Reuters, upon the expectation prices would fall.

As prices continued upward following Russia’s invasion, brokers began to order margin calls on short sellers. As short sellers began to lose more money than they could afford, new buyers swooped in. In addition, short sellers engaged in panic selling. along with panic selling from short sellers.

These movements triggered a chain reaction of buy orders. As a result, the nickel price skyrocketed to stunning levels.

The best way to track monthly nickel prices is to sign up for MetalMiner’s monthly MMI reports, which come direct to your inbox.

Dwindling LME warehouse stocks preceded the crisis

A decline in warehouse inventories does not inherently translate to rising prices.

Read more

The London Metal Exchange’s (LME) nickel price shot up by more than $1,000/mt on Friday Feb 25, a rise that one analyst directly connected to Russia’s invasion into Ukraine.

The official, three-month nickel bid price reached $25,625 per metric ton on Feb. 24, The price increased 4.3% on the day from $24,575/mt, data from the bourse showed.

Source: MetalMiner Insights

Therefore, prices could continue moving higher. Russia’s Norilsk Nickel serves as a major provider of nickel to global markets, an analyst told MetalMiner.

Moreover, Russia provides over 7% of global nickel production. Norilsk’s sales volume for 2021 reached 193,000 metric tons. This represents an 18% drop from the 235,709 metric tons produced in the previous year.

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LME warehouse stock levels

In addition, stocks of the metal in LME’ warehouses fell to 96,308 metric tons in January. This represents a 61.3% drop from the 248,962 metric tons for the same month in 2021, data from trading company Westmetall showed.

Although Europe’s need for nickel makes it unlikely that the company would directly come under sanctions, the analyst believed that measures to cut Russia’s access to capital markets in the West would further push up global nickel prices. That, in turn, could delay the company’s projects.

“I can see the squeeze on the finance side,” the analyst noted.

The alternative could drive Norilsk to seek financing from China. This could turn into offtake agreements as one method of payment. This could cause the company to become more reluctant to sell to non-Chinese markets.

Join the MetalMiner team for a 30-minute briefing on the aluminum and carbon steel markets as a result of the Russian invasion of Ukraine. The webinar runs from 11:00-11:30 central time on Wednesday, March 2.

Sanctions issued

The European Union announced in the early hours of Feb. 25, a row of sanctions against Russia.

European Commission President Ursula von der Leyen stipulated a five-pillar plan, which “includes financial sanctions, targeting 70% of the Russian banking market and key state-owned companies, including in defense.”

In addition, other sanctions will limit Russia’s access to technology. These sanctions could cover semiconductors or cutting-edge software, von der Leyen said.

Finally, the United States also introduced sanctions on Feb 24 against two of Russia’s largest financial institutions. These include the stet-owned VTB Bank and Sberbank. Those actions could cut their direct access to the dollar.

Ed Note: MetalMiner will publish a follow-up piece on the likely impact of sanctions on Monday, Feb 28

Stainless and electric vehicle batteries

About 70% of refined nickel goes to stainless steel production, specifically for austenitic, the analyst stated.

Another application for nickel is in batteries, such as for electrical vehicles, though the purity levels for that application do not need to be as stringent, the analyst added.

Companies can track the impact on metals prices by signing up for our Monthly MMI reports. The Stainless MMI, the Renewables MMI and the Automotive MMI all provide a gauge of inflation/deflation for global metals markets

Norilsk reported a full year EBITDA of $10.5 billion, up 37% year on year from about $7.67 billion the company on Feb. 10.

In addition, consolidated revenue was 15% higher at $17.9 billion, from almost $15.6 billion.

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.

MetalMiner’s free weekly newsletter is the easiest way to track the A&T Stainless trade case.

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.

If you need to track monthly metals inflation/deflation, consider signing up for our free monthly MMI report. 

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.

 

 

Nickel, traditionally largely consumed in the stainless steel industry, is enjoying strong support from its role as a lithium-ion battery enhancing metal.

The use of nickel reduces the need for cobalt, significantly battery reducing costs. Not surprisingly car makers are scrambling to lock up supplies as Chinese battery firms get first to market investing in mines and refining.

Want more from MetalMiner? We offer exclusive analyst commentary in our weekly updates – all metals, no sales fluff. 

BHP signs Tesla supply deal

nickel price

leszekglasner/Adobe Stock

BHP, for example, signed a deal last year to supply Tesla with nickel from its west Australian mine as demand from the EV market finally — after years of promise but poor uptake — begins to ramp up.

Traditionally, the stainless market has demanded purity and price. However, the battery market is also demanding as low a carbon footprint as possible from all its material suppliers (aluminum, nickel, cobalt, etc.).

That, in part, is what is behind BHP’s investment in a small, London-based nickel miner Kabanga Nickel Ltd.

Read more

The Stainless Monthly Metals Index (MMI) rose by 1.8% month over month.

January 2022 Stainless MMI chart

Although nickel edged up slowly in price, it squeezed into a wedge that is susceptible to big time frame resistance. Prices continue to consolidate within an October-November 2021 high-low price range.

A continuation to the upside with more volume from the bulls could push prices even further. Lower volume, however, could lead to price breakdowns in Q1 2022.

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A&T Stainless petitions for tariff exclusion

U.S. flat-rolled stainless supply is expected to be constrained in 2022.

However, there may be some light at the end of the tunnel.

A&T Stainless, the joint venture between Allegheny Technologies (ATI) and China’s Tsingshan, has filed a new petition with the U.S. Department of Commerce for a tariff exclusion to import 304L and 316L hot-band coils from Indonesia.

In May 2018, Katie Benchina Olsen, MetalMiner’s senior stainless analyst, examined whether A&T Stainless should be granted an exemption. At the time, NAS and Outokumpu argued that they could supply slab to A&T Stainless. The exemption was denied.

The 2022 market is different because NAS, Outokumpu and Cleveland-Cliffs are all full capacity and have customers on strict allocation.

Approval would advance capacity

If the exemption is granted, A&T Stainless would restart the Direct Roll Anneal and Pickle (DRAP) line in Midland, Pennsylvania. The line would produce about 20,000 tons a month of thicknesses .048″ and heavier. If the DOC approves the request, the DRAP line would take several weeks to start up.

Read more

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