Price of stainless steel could rise slightly in November 2019
We have seen a big rise in nickel prices over the past three months, and now the market has been calmed, but only partially.
We saw during September a great volatility with prices ranging from $17,000 to $18,600 per tonne. It seems that, although prices have been stabilized, we would no longer expect a large increase in prices. Nevertheless, we expect alloy surcharges will rise again, but very probably only a few cents.
Nickel
Nickel has been fluctuating since early September. Recently, however, its price has moved sideways around $17,700.
As already mentioned in this blog, the Indonesian ore export ban, which will come into effect on 1 January 2020, has led to a considerable increase in the price of nickel and high speculation. The struggle between the Philippines and China to lead the nickel pig iron market it’s already worrying the market fearing a supply shock. Chinese steel mills are making heavy purchases and stock levels drops clearly at the SHFE in Shanghai.
However, there is really no shortage of this material in the market. The INSG (International Nickel Study Group) announced that the market deficit is only 48,000 T during the first 7 months of the year.
On the other hand, it is highly likely that the increase in world production of nickel ore, with Philippines taking up the duty to supply nickel worldwide, will help to alleviate the current conditions.
Conclusion
The nickel market is under considerable stress due to the future restrictions from Indonesia. In our opinion, however, the situation is not serious despite the fact that the effects on stainless steel prices have been significant. The production capacity of nickel ore is palpable and has increased this year. Our scenario is that we could see more price fluctuations in the short term, but in the medium term we would not see another setback in the price of nickel or alloy surcharges.
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Spanish version posted in the Conecband’s blog.
