Normandy Metal Industry Co., Ltd.
Normandy Metal Industry Co., Ltd.

Stainless steel demand decreases, nickel prices fall

Jan 12 , 2024

The following content is reproduced from MetalMiner, and the copyright belongs to the original author. It is for reference only.

According to MetalMiner news on January 9, 2024, the nickel price remained in a strong downward trend throughout November, reaching the lowest point since April 2021. While prices appeared to be stabilizing in the first half of December, the nickel market has overwhelmingly proven itself to be the worst-performing metal, down around 45% year-to-date.

Overall, the Stainless Steel Monthly Metal Index (MMI) traded sideways, down 1.55% from December to January.


1. The stainless steel market ends quietly in 2023

NAS's 304 base price remained unchanged for the 24th consecutive month, while lower raw material prices caused surcharges to fall to their lowest level since April 2021. One service center found that the market changed little from month to month. Meanwhile, sluggish demand has triggered processors to halt production lines, while end-users continue to buy limited quantities with no effort to rebuild inventories. Ultimately, this translates into very little variation in average monthly factory lead times.


2. Outokumpu expects fourth-quarter sales to remain at the low end

Outokumpu held a pre-meeting conference call on January 4 as the market awaited its quarterly report. The company's CFO noted that they forecast global deliveries to grow 0-10% in the fourth quarter. Meanwhile, early data for the quarter suggests results are likely to be closer to the "lower end of this range." Reflecting the views of U.S. dealers, the producer said the market was little changed from the previous quarter. Ultimately, buyers remain reluctant to make long-term purchases until market conditions change.

In Europe, import volumes remain low, with CFO Pia Aaltonen-Forsell describing the overall market as "challenging." She also said she expected the region's recovery to "take time" in the third quarter, in terms of demand and prices. Described as the bottom of the market, although orders through February appear to have been relatively light. In the Americas, analysts described market sentiment as "soft" with import levels helping to hold down domestic prices. Unlike Europe, where conditions appear to be worsening quarter-on-quarter, there is no clear evidence that the market has bottomed.

3. Bearish nickel prices haven’t stopped miners

Despite rising glut forecasts and bearish prices, miners are yet to slow output. This is especially true as Canada continues to see new investment. For example, Magna Mining, which owns multiple mines in Ontario, continues to plan production and trial mining at its Crean Hill mine in 2024. The company will also restart production of Shakespeare within two to three years.


4. Political tensions threaten Indonesia’s nickel advantage

Indonesia also uses coal to fuel its processing equipment, in contrast to Western green efforts.

With no signs of a significant slowdown in Indonesia's economy and an increase in Western production capacity, glut in the nickel market is likely to continue to weigh on global nickel prices. This could add to overall bearish sentiment in the stainless steel market, as the long-term downward trend in nickel prices continues to weigh on overall surcharges.

5. Price

China's ferromolybdenum block price has seen the largest overall index increase (albeit not by much), rising 2.22% to US$29,682 per metric ton as of January 1.

Chinese ferrochrome bullion prices also moved sideways, rising 1.87% to $1,943 per metric ton.

At the same time, the price of 304 stainless steel cold rolled coils in South Korea fell slightly, down 1.87% to $2,662 per metric ton.

The price of 316 stainless steel in China fell 12.52% to US$2,337 per metric ton.

The price of 304 stainless steel in China fell the most, falling 13.66% to US$1,287 per metric ton.

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