Page 59 from: Recycling International September issue | 2021
niCkel & stainless
rising demand despite supply
chain disruptions
plate and coil in July 2019. Of note,
import duties on stainless steel imports
from the European Union, Japan, and
South Korea are expected to remain in
place for the foreseeable future.
For stainless steel scrap exporters,
challenging shipping and container
market conditions continue to pose
significant challenges. As one example,
US stainless steel scrap exports during
the first half of 2021 were down 17%
compared to the same period in 2020
to less than 130 000 tonnes, despite
improved scrap demand from India. US
recyclers and manufacturers face a
potentially larger challenge from sup-
ply chain disruptions as major auto
producers GM and Ford announced
significant production cuts in early
September due to the shortage of
semiconductors.
Complicating these supply chain issues
is the continued uncertainty surround-
ing the spread of new coronavirus vari-
ants. Fastmarkets reports ‘the spread
of the Covid Delta variant continues to
create short-term headwinds for global
economic activity. The reintroduction
of lockdowns, travel restrictions and
mass testing in China risks compound-
ing supply chain disruptions caused by
the semiconductor shortage’.
Despite the transportation, supply
chain, and labour market disruptions,
the current outlook for the stainless
steel industry is for relatively limited
capacity expansion outside of
Indonesia, rapid global demand
growth and elevated raw material pric-
es, which should bode well for stainless
steel recycling volumes and profitabili-
ty.
Will nickel break US$ 20 000 per tonne?
The recent nickel rally has been driven by strong demand
after the 2020 slump resulted in reduced supply, espe-
cially for Class I Ni. This prompted a hefty drop in LME and SHFE stocks as
shown in the graph. Demand will remain strong in the next six months but
the supply outlook has significantly improved with Vale and Norilsk due to
return to normal production levels in October. Although technical analysis
indicates that the US$ 20 000 per tonne mark will be broken soon, we
would be cautious as the current level could be close to the peak for this
year. The key will once again be in China, where nickel is being sold at sig-
nificant premiums to the LME. According to Chinese industry sources, the
government wants to curtail stainless steel production in the second half of
the year to that reported over the same period last year.
Nickel
/3-mtsNickel Price (in U.S. dollars /t) LME Stocks (x 1000 metric tonnes)/
– 2 0 1 5 – – 2 0 1 6 – – 2 0 1 7 – – 2 0 1 8 – – 2 0 1 9 – – 2 0 2 0 – – 2 0 2 1 –
Reference date: September 6, 2021
500
450
400
350
300
250
200
150
100
50
20,000
17,000
14,000
11,000
8,000
5,000
59recyclinginternational.com | September/October | 2021
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