Industrial Insight

Stainless | July 29, 2015

MEPS: STAINLESS PRICE UPTURN NEXT 12 MONTHS

30 June 2015

Currently, the short-term outlook for the stainless steel market is mixed as demand varies by sector.

For example, sales to the automotive supply chain are quite buoyant but investment in the oil industry is very depressed, as it has been since commodity oil values started to fall, last year. Activity in other stainless steel-consuming segments is patchy, with geographical pockets of optimism dotted around the world.

European stainless steel strip mills have rapidly-filling rolling schedules. Delivery lead times are stretching and there are murmurs of possible short supply in the autumn. Producers have achieved small basis price increases, this month, and further increments are mooted. However, these minor adjustments are almost insignificant in the light of the much larger fluctuations in alloy surcharges.

After falling in the previous month, a short-lived recovery in LME nickel values in late April and early May resulted in alloy extras for grade 304 material climbing again for June. The nickel commodity price has been on a downward trend again in recent weeks.

Many market observers predicted rising nickel values, this year, with the long-standing global supply surplus finally turning to a deficit. The main driver for this was expected to be China’s increasing demand for refined nickel, as that country’s stainless steel production continued to expand. Meanwhile, its supply of nickel pig iron (NPI) would be restricted by Indonesia’s ban on the export of laterite ores.

In reality, China’s output growth has decreased, in 2015, and the depletion of its Indonesian ore stocks has been slowed by blending, in the NPI production process, with inferior ore from the Philippines.

Nevertheless, nickel miners continue to forecast the emergence of a deficit in supply in the short-to-medium term. This would result in a modest upward trend in nickel values during the coming twelve months.

Advertisements

Posted in Uncategorized

Leave a Comment »

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: