Outlook is bright despite fears of inflationary pressures on raw materials.
As global demand for metals continues to ramp up amid rising manufacturing and economic output, market conditions for nickel and stainless steel recyclers are reportedly improving. Reflecting the pent-up demand from previous Covid-induced shutdowns and ongoing supply constraints, rising prices for primary nickel and finished steel have been supportive features.
After having dipped below US$ 17 000 per tonne in late May, LME cash nickel prices were trading up around US$ 18 500 per tonne at the end of June as stocks were being depleted. As of early July, there were just over 230 000 tonnes of nickel in LME warehouses, a decrease of 33 000 tonnes since late April. While both governments and investors are becoming increasingly concerned about the impact of rising prices on industrial output, most forecasters are projecting higher stainless steel production and nickel prices this year.
The J.P. Morgan Global Manufacturing Purchasing Managers Index (PMI) of 55.5 in June signalled the 12th consecutive month of expansion. According to IHS Markit, ‘Global manufacturing remained in a strong growth phase in June with output, new orders and employment all rising and business optimism at robust levels. However, stressed global supply chains continued to disrupt production schedules and delay input deliveries resulting in sharp price increases.’
Manufacturing conditions in Europe were particularly bright in June, with the seven highest manufacturing PMI readings all located in Europe, followed by the United States. Rising steel production has been a key component of the improved manufacturing landscape.
According to the International Stainless Steel Forum (ISSF), global stainless steel melt shop production rose 24.7% year-on-year during the first quarter of 2021 to 14.5 million tonnes.
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