Page 38 from: June / July 2013
38 June/July 2013
M A R K E T A N A L Y S I S
Nickel & Stainless
40
80
120
200
180
140
100
60
20
160
16000
20000
24000
32000
28000
12000
2009 2010 2011 2012 2013
– LME stocks (x 1000 metric tonnes)
– LME prices (in U.S. dollars/MT)
Nickel (global)
Lack of Stimulus – the LME Nickel
prices remained at 15,000 US/t in
June 2013. Supply exceeded
demand since several months
already (new facilities came on
stream, high NPI production),
while mills remained reluctant with
order volumes. There is increasing
pessimism amongst buyers wheth-
er a substantial market improve-
ment will take place after summer
holidays.
Closed: June 12 2013
Closed: June 12 2013
Stainless steel’s valley of tears
Stainless steel scrap values have suffered further
declines in recent weeks. The price range for the 304
quality has slid from US$ 1500-1550 to US$ 1460-
1510 per tonne since our report of early May, while
the 316 grade has retreated from US$ 2150-2200
to US$ 2100-2150. However, chrome scrap prices
have made slight currency-related gains, with
409 climbing from US$ 400-440 to US$ 420-
460 per tonne and the 430 quality from
US$ 480-520 to US$ 490-530.
Since our previous report, stainless steel scrap prices have taken a
backward step in concert with the LME
nickel quotation and steel scrap values.
The 304 quality has seen its values
slashed to US$ 1460-1510 per tonne
while the 316 grade has dropped to
US$ 2100-2150. Chrome scrap prices
suffered under the impact of steel scrap
weakness, but the higher Euro/US dol-
lar exchange rate (1.315 at the time of
writing) has pushed up the 409 quality
to US$ 420-460 per tonne and 430
material to US$ 490-530.
Over recent weeks, nickel prices have
remained under pressure owing to
weak physical demand and ample sup-
ply, as well as high and rising LME
stocks which have reached a record
level in excess of 180 000 tonnes.
Unable to breach resistance above
US$ 15 300 per tonne, the market
ended week 21 close to lows of
US$ 14 700 – a level at which it is esti-
mated that around 40% of all nickel
producers are no longer profitable.
Therefore, further production cuts are
likely, primarily at nickel pig iron pro-
ducers in China and among other
higher-cost producers.
China started week 23 by buying
around 30 000 tonnes of nickel for
strategic reasons. The International
Stainless Steel Forum has noted high
stainless steel production in this year’s
fi rst quarter, with China reporting an
increase of 18% to 4.4 million tonnes.
The International Nickel Study Group
confi rmed a fi rst-quarter surplus for the
metal of 33 100 tonnes; Norilsk Nickel
lowered its production by 5.6% to
71 600 tonnes when compared to
January-March 2012.
Depressed atmosphere
Headlines like ‘European stainless
sheet, bar prices remain at depressed
levels’ and ‘Restructuring follows 80%
drop in earnings for Outokumpu group’
illustrate current conditions in the
EU-27 stainless steel industry where
the atmosphere is depressed and hope
is in short supply for 2013. As the
author of 50 Nickel & Stainless reports
for ‘Recycling International’ over the
last fi ve years, it is regrettable to have
to confi rm a crisis extending across the
entire stainless steel sector – from raw
materials and production through to
consumption.
Heinz H. Pariser Alloy Metals & Steel
Market Research notes that EU crude
stainless steel production rebounded
2.9% in the fi rst quarter of 2013 com-
pared to the same period in 2012. The
nickel austenitic rate has shifted from
75% in 2012 to 78% in 2013.
Chrome
South Africa’s president Jacob Zuma
has reportedly ‘drawn the line on wild-
cat strikes, implicitly declaring unequiv-
ocal zero tolerance on future industrial
action that is outside the law’. Lanxess
and Glencore Xstrata have suffered a
standstill at their chrome ore mines.
Although there is some confusion sur-
By Gerhard Teborg et al
RI-5_maNickelStainless.indd 38 17-06-13 15:19
