Category: Nickel

From: MEPS

Nickel prices moved lower in July as they fell further into their deep descent. The July monthly average is set to be around $US8,500 per tonne lower than June’s figure. Values are now forecast to go below the psychological $US30,000 per tonne in August as stocks on the LME continue to rise. There is still the possibility for another severe drop in the cost of nickel. Stability should return to the market later this year as production cuts from stainless steel producers over the Summer months come to an end. New nickel capacity, due on stream later this year and in 2008, is expected to prevent values rising dramatically before the end of the forecast period.

From MEPS, a steel-supplier-side news service, but important for us steel consumers too.

Western stainless steel producers of strip mill products have temporarily abandoned their traditional basis plus surcharge mechanism for selling their material. Most EU and US mills are now quoting only transaction (effective) figures. This is, principally, to disguise the discounts necessary to obtain orders after the fall in the price of nickel since early June.

Mill orders have dried up. Many producers have plans to cut output in the short term but are pushing material into stock and selling at substantially discounted levels to generate the limited business available.

The question becomes, will end use customers accept the new materials? Will they form similarly enough that they can be used with existing tooling? Or will jobs need to be retooled?

Our experience with one these grades (409) was that it was less “stainless”, and that it required different tool steels to cut and form.

The significant investment in new equipment by steel mills implies they believe the run-up in nickel prices is not going to be short-lived. They presumably know – they’re in the business. But re-tooling decisions (if needed) of stamping jobs would be made with people with less experience forecasting the future. So it isn’t clear if customers will be able to switch all that quickly.

MEPS
The global stainless steel scene is changing rapidly. Customer backlash against the rising cost of nickel has been taken on board by the producers. Mills are now taking seriously market demand for low or non nickel grades.

Global supplies of 300 series material have in the past formed 75 percent of total stainless deliveries. It is interesting to note that Thyssen Krupp recently announced that it may lift output of nickel free steel from the existing figure of 30 percent up to 35 percent. We have reports that an Arcelor Mittal senior executive sees the potential to push up production of non nickel grades to 70 percent in the long term.

The Toronto Star

Posco, the world’s fourth-largest steel maker, will raise output of a nickel-free stainless steel fivefold next year as the price of nickel has hit a record.

Posco plans to sell 10,000 tonnes a month of the steel, which it introduced this month, from 2,000 this year, the Pohang-based firm said yesterday. The steel, which uses chromium instead of nickel, is the equivalent of $2,762 (Canadian) a tonne, half the price of so-called 300-series cold-rolled coil steel.