ATI secures nickel ‘safety stock’: Wetherbee

Allegheny Technologies Inc (ATI) has taken “decisive procurement actions to create a near-term price-protected nickel safety stock,” company chairman, president and chief executive officer Robert Wetherbee said in a conference call on Wednesday May 4.

“This will ensure an uninterrupted flow of materials to meet increasing customer demand,” he added, pointing to “disrupted availability” and noting that nickel prices rose by more than 30% in March.

Goldman Sachs in late April forecast that the Class 1 nickel market faces a 196,000-tonne deficit in 2022, up from a 185,000-tonne deficit in 2021.

Pittsburgh-based ATI also reported significant price increases for other key raw materials – including cobalt, ferro-chrome and molybdenum – in the first quarter.

ATI therefore “raised prices to offset the additional raw material, labor and supply-chain costs we’re experiencing,” Wetherbee said. “In product lines with fewer long-term customer agreements, we’re able to fully offset inflation in the first quarter.”

In product lines with long-term agreements, however, where the impact of higher costs will lag “about a quarter,” ATI’s future earnings could be affected, he said.

The CEO also said he expected the company’s customers to rethink global supply chains and reallocate some of their demand for raw materials – especially titanium – to western suppliers.

ATI reported net income of $30.9 million on $834.1 million in sales in the first quarter, reversing the $29.8-million loss on $765.4 million in sales reported in the fourth quarter of 2021. The first-quarter results also mark an improvement from a loss of $7.9 million on $692.5 million in sales in the first quarter of 2021.

What to read next
The publication of several of Fastmarkets' copper concentrates indices was delayed on Friday February 27 because of a technical error. Fastmarkets' pricing database has been updated.
Discover how fear, deglobalization and AI are transforming the copper market. Insights from the Fast Forward podcast's interview with David Lilley of Drakewood Capital.
Fastmarkets has corrected its MB-BX-0016 Bauxite, cif China, price assessment, which was published incorrectly on Friday February 20.
Fastmarkets invited feedback from the industry on the pricing methodology for its non-ferrous materials and industrial minerals prices, via an open consultation process between January 6 and February 6. This consultation was done as part of our published annual methodology review process.
Fastmarkets selects the frequency of publication of a market assessment after considering the number of data points (deals, bids, offers, deals heard and assessments) that it can reasonably expect to collect on a consistent basis over the selected period to support the price assessment process. This proposal follows preliminary discussions with the market as well […]
The publication of Fastmarkets’ European aluminium billet premiums assessments for Friday February 6 was delayed because of a procedural error. Fastmarkets’ pricing database has been updated.