MetalMiner has long held the belief that no super-cycle exists to drive commodities prices. The argument against the super cycle suggests a lack of a 10-year sustained growth trend of new demand to support such a cycle. And despite not having a sustained growth demand cycle, metal prices remain extremely volatile due to supply constraints. These constraints will likely continue throughout 2022.
What we are watching
For stainless steel buyers, MetalMiner has kept a close eye on a tariff exclusion request from A&T Stainless. The request would allow the joint venture between Allegheny Technologies and China’s Tsingshan to import hot rolled band from Indonesia to produce 304L and 316L.
In addition, according to MetalMiner’s own Katie Benchina Olsen, “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.”
On Thursday, Jan 27 at 11:00am Katie Benchina Olsen will update MetalMiner readers on the ramifications of the exclusion request during our monthly webinar. Readers can sign up here to attend.
Moreover, not everyone will support the exclusion request. Specifically, other domestic mills will likely oppose it as they have customers on strict allocation.
Nickel prices rising on dwindling inventory levels
Concurrently, nickel has seen strong global demand amid falling LME warehouse stocks and renewed concerns over tight supply. LME warehouse stocks have plunged to their lowest levels since 2019 at 99,462 metric tons. They remain roughly half of where they stood just in August of last year. Many factors drive the current nickel market including strong stainless demand (although China demand is expected to cool down) and EV battery demand.
Tesla rumors on SDI false
Metal nerds know that the SDI plant going up in Sinton TX would not supply the Tesla Cybertruck (SDI produces steel and not stainless steel). The new Tesla Cybertruck will apparently make use of a stainless steel exoskeleton. Delorean fans might recall that car used 301 stainless.
Aluminum prices continue to move up
Meanwhile, the European energy crisis continues to roil Europe. With multiple smelter shutdowns due to surging energy prices and eroded profits, tight aluminum supply continues both in Europe as well as in China. The curtailed production there due to its own energy crisis and reduction of carbon emissions goals has led to a reduction in supply.
Join the MetalMiner team on Thursday, Jan 27 at 11:00am for additional information on all of these metals, carbon steels and how AI and advanced algorithmic modeling yields more accurate forecast results.