NICKEL & STAINLESS
Markets in disarray compound
weak New Year
was trading at a small premium to
LME prices a year ago but was now
selling at discounts of around US$ 2
000 per tonne.
The market for ferrochrome, another
key stainless steel raw material, has
also been heavily impacted by supply
disruptions due to the shutdown in
South African operations. Reuters
reports that major ferrochrome pro-
ducer Samancor Chrome declared
force majeure because of South
Africa’s coronavirus lockdown, follow-
ing similar announcements by chrome
and platinum producer Tharisa and
the Glencore/Merafe Resources JV
ferrochrome smelter in Rustenburg,
South Africa. Not surprisingly, given
the upheaval in raw material inputs,
declining asset prices and falling steel
production and demand, stainless
steel and stainless scrap prices have
come under pressure this year, with
latest Fastmarkets’ monthly assess-
ment for cold-rolled 304 stainless
steel sheet falling 2.5%.
FUTURE UNCERTAINTY
For stainless steel producers, there
have been some sources of support as
stainless steel has been deemed an
essential industry in a number of
economies. In addition, healthcare
systems rely on stainless steel for
numerous applications including venti-
lators, oxygen tanks, hospital beds,
and more. For European stainless
steel producers, the recently imposed
anti-dumping duties on certain stain-
less steel products from China,
Indonesia, and Taiwan may provide
some temporary relief. In addition,
on-going primary commodity supply
disruptions could incentivize increased
use of stainless steel scrap by the
mills. However, as with practically all
industries today, the depth and dura-
tion of the current economic contrac-
tion stemming from the COVID-19
pandemic remains the key uncertainty
for scrap processors and stainless
steel producers going forward.
The floor level seems to hold!
Similar to one year ago the support level at 11,000 $/t
seems to be robust. Also in China the NPI prices are sta-
ble since the end of March based on relatively small Ni ore reserves at
Chinese Ports. But, the subdued stainless steel demand in Europe, USA
and major Asian markets will limit the Ni demand through out Q2. Thus, as
long as the LME stocks remain stable we see no reason for a sustainable Ni
price increase.
Nickel
/3-mtsNickel Price (in U.S. dollars /t) LME Stocks (x 1000 metric tonnes)/
– 2 0 1 4 – – 2 0 1 5 – – 2 0 1 6 – – 2 0 1 7 – – 2 0 1 8 – – 2 0 1 9 – – 2 0 2 0 –
Reference date: April 15, 2020
500
450
400
35a0
300
250
200
150
100
50
35,000
32,000
29,000
26,000
23,000
20,000
17,000
14,000
10,000
8,000
5,000
68-69_manickelstainesshsku.indd 69 15-04-20 15:33
