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NICKEL & STAINLESS

Uncertainty for global industry
despite nickel price rise

BIR World Mirror on Stainless Steel &
Special Alloys that import competition
is another challenging factor in Europe,
as ‘penetration of finished stainless
goods into the EU is at a record high of
more than 30%’. He added: ‘Not only
the import volumes but also the price
levels offered remain a threat.’ Weaker
auto production in Europe, along with
falling ferrous and chrome prices,
have also presented challenges. As a
result, according to Uwe Dierkes of
Siegfried Jacob Metallwerke, European
market conditions are not expected
to improve before the first quarter of
2020.

CHALLENGING US CONDITIONS
Stainless steel scrap prices in the
United States have not kept pace
with the rise of exchange-trade nickel
prices. In the Eastern US, published
prices for 304 solids and clips recently
advanced to more than US$ 1 275
per gross tonne delivered to the mill
but that was still eclipsed by the gains
in primary nickel prices. Diminished
export demand for US stainless steel
scrap has only complicated matters.
According to official US trade statistics,
stainless steel scrap exports during the
first half of 2019 declined 30% when
compared to the first half of 2018 to
230 521 tonnes as shipments to China
shrank 98% lower, alongside weaker
demand from Canada, Pakistan,
Vietnam and South Korea.
Although trade flows improved with
Taiwan, India, Mexico and others,
these gains were insufficient to offset
the losses to other markets. As trade
with China has abruptly declined, stain-
less steel trade flows between the US,
Canada, and Mexico have become
increasing important. According to the
International Stainless Steel Forum,

trade flows of stainless steel products
within the NAFTA region reached 570
000 tonnes last year. As a result, stain-
less steel market participants should
be closely monitoring the ratification
process for the new US, Mexico and
Canada trade agreement.

ASIA STILL KEY GLOBAL DRIVER
Rising stainless steel production in
China, capacity expansion plans in
Indonesia and the Indonesian nickel
ore export ban have all had significant
repercussions for the global nickel
and stainless steel markets. Analysts
expect that the Indonesian export ban
could add another 200 000 tonnes to
the global nickel supply deficit in the
next year or two, which could further
underpin nickel prices. Of note, there
are some indications that global fer-
rochrome prices may have bottomed
out as major Chinese stainless steel
producer Tisco is reportedly switching
its domestic ferrochrome purchases to
a quarterly basis.
Given the volatility in raw material
input prices for stainless steel in Asia
including nickel, nickel pig iron, ferro-
chrome, and other materials, new price
hedging instruments are being intro-
duced. In September, the Shanghai
Futures Exchange launched the first
stainless steel futures contract. The
SHFE indicates the standard product to
be traded will be stainless steel cold-
rolled coil 304/2B 2.0mm x 1,219mm
with trimmed edges, traded in five
tonne lots and priced in Yuan (RMB).
According to Fastmarkets, ‘Sources
foresee nickel futures – which are
actively traded on the SHFE and the
London Metal Exchange – having a
considerable impact on stainless steel
futures, which in turn will affect the
spot market.’

67recyclinginternational.com | September/October | 2019

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