Higher-than-expected demand anticipated next year but trade could be affected by regulators’ concerns over Indonesian ‘dumping’.
The latest economic and manufacturing data in the world’s major economies is pointing to a faster than expected recovery from the sharp global contraction, even as the recent surge in coronavirus cases in Europe and the United States casts a shadow on fourth quarter prospects. The generally upbeat economic news, particularly from China, has been supportive for most base metal prices, including nickel.
In London, the LME official cash nickel price rose as high as US$ 16 064 per tonne in late October while nickel stocks in LME warehouses continued to hover near 240 000 tonnes. Although market analysts remain concerned about the global primary nickel market surplus, rising Indonesian nickel pig iron production and trade policy uncertainty, the consensus forecast is for a rebound in stainless steel demand next year.
Recovery from low levels
According to the latest figures from the International Stainless Steel Forum, stainless steel melt shop production in Europe and the USA declined 25% and 28%, respectively, in the second quarter of 2020 as compared to the preceding quarter. Overall, global stainless production declined 9.4% year-on-year in the first half of 2020, ISSF estimates. Quarterly corporate reports indicate stainless market conditions in the West remained challenging in the third quarter.
Finland-based Outokumpu Oyg reports stainless demand in the USA declined 20% year-on-year in the third quarter, while sluggish orders indicate demand for Outokumpu’s long products in Europe and the US is not expected to rebound until 2021. But with the global economy expected to improve next year, analysts expect stainless steel and stainless scrap demand to pick up as well. ISSF is projecting global stainless steel consumption will increase 8.4% in 2021, including a 6.5% increase in China.
At the Bureau of International Recycling’s stainless steel & special alloys committee webinar in October, Markus Moll of SMR projected an even larger 11% increase in stainless steel demand next year. Looking further ahead, Moll projects the share of 300-series stainless steel production will increase from 54.1% in 2019 to 59.3% in 2030, which should also bode well for scrap demand.
Stay tuned! Read the full market analysis in the upcoming issue of Recycling International.
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