Nickel prices surged to an 11-year high last month as LME warehouse inventories tumbled.Prices retreated in late January after a small sell-off, but managed to bounce back.They may break out to new levels as prices climb to recent highs.Alternatively, they can reject these levels and fall back into the current trading range.
Last month, MetalMiner reported that A&T Stainless, a joint venture between Allegheny Technologies (ATI) and China’s Tsingshan, applied for a Section 232 exclusion of Indonesian “clean” hot-rolled strip imported from the joint venture’s Tsingshan plant.After filing the application, U.S. producers hit back.
US producers objected, refusing to “clean” hot strip (free of residual elements) as necessary.Domestic producers reject the argument that this “clean” material is needed for the DRAP line.There has never been such a requirement in previous U.S. slab supply.Outokumpu and Cleveland Cliffs also believe that tropical Indonesia contains a larger carbon footprint than U.S. materials.Indonesian bands use nickel pig iron instead of stainless steel scrap.An exemption decision could be made by the end of the first quarter following a review of A&T Stainless’s rebuttal.
Meanwhile, North American Stainless (NAS), Outokumpu (OTK) and Cleveland Cliffs (Cliffs) continue to specify alloys and products accepted within the distribution.For example, 201, 301, 430 and 409 are still factory limited as a percentage of the total allocation.Lightweight, special finishes and non-standard widths also have limitations in the distribution structure.Additionally, allocations are made monthly, so service centers and end users must fill their annual allocations in equal monthly “buckets.”NAS begins taking orders for April delivery.
Nickel prices surged to an 11-year high in January.LME warehouse stocks fell to 94,830 metric tons by January 21, with three-month primary nickel prices reaching $23,720/t.Prices managed to bounce back in the final days of the month, but then resumed their gains as prices chased late-January highs.Despite the rebound, LME warehouse inventories continued to decline.Inventories are now below 90,000 metric tons as of early February, the lowest level since 2019.
Warehouse inventories fell due to strong demand for nickel from stainless steel and the emerging electric vehicle (EV) industry.As MetalMiner’s own Stuart Burns points out, while the stainless industry is likely to cool throughout the year, the use of nickel in batteries that power electric vehicles is likely to accelerate as the industry continues to grow.In 2021, global electric vehicle sales will more than double from the previous year.According to Rho Motion, more than 6.36 million electric vehicles will be sold in 2021, compared to 3.1 million in 2020.China alone accounted for about half of last year’s sales.
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Despite the recent tightening, prices are still well below their 2007 gains.LME nickel prices hit $50,000 per ton in 2007 as LME warehouse stocks fell below 5,000 tons.While the current nickel price is still in an overall upward trend, the price is still well below its 2007 peak.
Allegheny Ludlum 304 stainless surcharges rose 2.62% to $1.27 a pound as of Feb. 1.Meanwhile, the Allegheny Ludlum 316 surcharge rose 2.85% to $1.80 per pound.
China’s 316 CRC edged up 1.92% to $4,315 a metric ton.Likewise, 304 CRC rose 2.36% to $2,776 a metric ton.China’s primary nickel price rose 10.29% to $26,651 a tonne.
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