market analysis
improving prospects for stainless
steel and nickel markets
Outlook is bright despite fears of inflationary
pressures on raw materials.
casters are projecting higher stainless
steel production and nickel prices this
year.
Output rebOunds
The J.P. Morgan Global Manufacturing
Purchasing Managers Index (PMI) of
55.5 in June signalled the 12th consec-
utive month of expansion. According
to IHS Markit, ‘Global manufacturing
remained in a strong growth phase in
June with output, new orders and
employment all rising and business
optimism at robust levels. However,
stressed global supply chains contin-
ued to disrupt production schedules
and delay input deliveries resulting in
sharp price increases.’
Manufacturing conditions in Europe
were particularly bright in June, with
the seven highest manufacturing PMI
readings all located in Europe, fol-
lowed by the United States.
Rising steel production has been a key
component of the improved manufac-
turing landscape. According to the
International Stainless Steel Forum
(ISSF), global stainless steel melt shop
production rose 24.7% year-on-year
during the first quarter of 2021 to 14.5
million tonnes. China remains the dom-
inant stainless steel producer, having
produced nearly 8.2 million tonnes of
stainless in the first quarter, an increase
of 36.9% on the first quarter of 2020.
At the same time, stainless steel pro-
duction in Europe registered a 5.3%
year-on-year increase, according to
ISSF figures. Major stainless producer
Outokumpu reports first quarter 2021
stainless steel deliveries rose 16% from
the previous quarter while ‘profitability
was supported by higher realised pric-
es, especially in Europe, and fixed
costs were at a lower level’.
InflatIOn cOncerns
Despite the broadly positive manufac-
turing reports, rising inflation levels in
the major developed economies are of
concern. According to Eurostat, indus-
trial producer prices in Europe in June
rose 9.6% year-on-year. As rising raw
material costs present challenges for
industrial production and economic
growth, governments are starting to
500 per tonne at the end of June as
stocks were being depleted. As of
early July, there were just over 230 000
tonnes of nickel in LME warehouses, a
decrease of 33 000 tonnes since late
April. While both governments and
investors are becoming increasingly
concerned about the impact of rising
prices on industrial output, most fore-
82
As global demand for metals continues
to ramp up amid rising manufacturing
and economic output, market condi-
tions for nickel and stainless steel recy-
clers are reportedly improving.
Reflecting the pent-up demand from
previous Covid-induced shutdowns
and ongoing supply constraints, rising
prices for primary nickel and finished
steel have been supportive features.
After having dipped below US$ 17 000
per tonne in late May, LME cash nickel
prices were trading up around US$ 18
82-83_manickelstainless.indd 82 06-07-21 14:39
