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“There is renewed, growing concern that nickel supply will come under pressure as the Russia/Ukraine conflict continues,” one dealer said.
Market participants pointed to a number of factors that have shrunk supply and pushed prices higher.
According to one source, the nickel price uptick partly resulted from a recent explosion at a nickel pig iron facility in Indonesia, along with a weak dollar and reports of the Goro mine in New Caledonia slashing output following a tailings-dam leak.
Another source indicated that nickel producers have very little product available for sale, causing mills to scramble to get nickel supplies going forward.
“Even consumers who have been out of the market have quickly returned with aggressive buying prices to ensure they have material available for any mill demand that may develop,” the dealer said.
Fastmarkets’ weekly assessment of the stainless steel scrap 316 solids, clips, broker buying price, delivered to processor Pittsburgh jumped to $0.93-1.00 per lb ($2,083-2,240 per gross ton) on Tuesday November 15 from 86-90 cents per lb ($1,926-2,016 per gross ton) previously.
Fastmarkets’ assessment of the broker buying price for 304 solids, clips, delivered to processor Pittsburgh gained 9 cents on the low side and 10 cents on the high side to 54-60 cents per lb from 45-50 cents per lb, while that for 304 turnings, delivered to processor Pittsburgh climbed by 12 cents on the low side and 9 cents on the high side to 50-54 cents per lb from 38-45 cents per lb on November 8.
Fastmarkets’ weekly assessment of the broker buying price for stainless steel scrap 430 bundles, solids, delivered to processor Pittsburgh gained a penny on the low side, narrowing up to 17-20 cents per lb from 16-20 cents per lb previously, while that for 430 turnings, delivered to processor Pittsburgh rose by 6 cents on the low side to 15-16 cents per lb from 9-16 cents per lb previously.
Fastmarkets’ weekly assessment of the broker buying price for 409 bundles, solids, delivered to processor Pittsburgh remained at 14-16 cents per lb on Tuesday, while that for 409 turnings, delivered to processor Pittsburgh gained 2 cents on the high side, rising to 9-15 cents per lb on November 15 from 9-13 cents per lb previously.
Once again in 2022, the LME nickel cash contract has jumped precariously, gaining $5,180 per tonne ($2.35 per lb) in less than a week to reach $29,600 per tonne ($13.426 per lb) on Tuesday – its highest since $29,975 per tonne ($13.60 per lb) on May 30 – from $24,420 per tonne ($11.08 per lb) on Thursday November 10.
Given the fluctuations in the nickel market, processors and dealers have discussed changing how they calculate the value of nickel in stainless scrap, with some suggesting the use of an average price — rather than daily — to smooth out day-to-day volatility. The consumer prices for stainless scrap do just that, using the average nickel cash price from the previous month in their calculations, Fastmarkets understands.
“Still trying to work out where to be on this crazy market,” one processor said.
“I am raising prices today — going to get into the mid $.40’s for 304, so hopefully it will loosen up some flow since we are off over 50% on incoming material,” a second dealer said.
The LME’s nickel cash contract closed the official session at $29,600 per tonne on November 15, up by 26.44% from $23,410 per tonne ($10.62 per lb) on November 8. The market slid back on Wednesday, November 16 to $28,555 per tonne ($12.95 per lb).
LME nickel stocks lost ground over the past week, falling by 486 tonnes to 49,926 tonnes at the close on November 15 from 50,412 tonnes at the close on November 8.