Page 66 from: Read it online: issue 6!
market analysis
stainless outlook improves
amid rising nickel prices
Higher-than-expected demand anticipated next year but trade could be affected
by regulators’ concerns over Indonesian ‘dumping’.
gish 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 pro-
jecting global stainless steel consump-
tion will increase 8.4% in 2021, includ-
ing a 6.5% increase in China. At the
Bureau of International Recycling’s
stainless steel & special alloys commit-
tee webinar in October, Markus Moll of
SMR projected an even larger 11%
increase in stainless steel demand next
year. Looking further ahead, Moll proj-
ects 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.
FOCUS ON ASIA
The Caixin China General
Manufacturing PMI advanced from
53.0 in September to 53.6 in October,
the best reading since January 2011
according to Dr Wang Zhe, senior
economist at Caixin Insight Group.
Chinese stimulus measures have not
only underpinned China’s manufactur-
ing sector but are also widely viewed
as supportive of Chinese electric vehi-
cle demand and, by extension, nickel
demand. But for now, global nickel
production continues to exceed global
demand despite some Covid-related
mine closures.
For the first eight months of 2020, the
World Bureau of Metal Statistics esti-
mates global refined nickel production
exceeded demand by 45 000 tonnes,
Fastmarkets reports. For all of 2020,
Fastmarkets is projecting a global nick-
el surplus of 111 000 tonnes.
Complicating the global market bal-
ance is the ramping up of nickel pig
iron production in China and Indonesia.
According to Macquarie Research, ‘Q3
saw a quarter-on-quarter rise in NPI
production in both China and
Indonesia, reflecting an acceleration of
planned expansions in Indonesia and
better nickel prices in China’.
Macquarie forecasts Indonesian NPI
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 quar-
ter of 2020 as compared to the pre-
ceding quarter. Overall, global stain-
less production declined 9.4% year-on-
year in the first half of 2020, ISSF esti-
mates. 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 slug-
66
The latest economic and manufactur-
ing data in the world’s major econo-
mies 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 gen-
erally upbeat economic news, particu-
larly 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 uncer-
tainty, the consensus forecast is for a
rebound in stainless steel demand next
year.
66-67_manickelstainless.indd 66 11-11-20 14:28
