EXPLODING NICKEL PRICES DRIVING THE STAINLESS STEEL MARKET HIGHER
Nickel prices at the time of writing, hovered around $US30,000 per tonne. This suggests that alloy surcharges on stainless steel will remain at their current unprecedented high levels for at least two months.
For type 304 flat products, surcharges in October will be in excess of €1,900 per tonne in Europe and more than $US2,500 per short ton in the US. Alloy surcharges have risen by more than 150 percent since January.
The LME price of nickel has doubled since March, and there is much controversy about the reasons for this. Users continue to claim that the nickel market is not under-supplied, and that the upsurge in prices is the result of speculation by financial investors. It is true that LME nickel stocks have been extremely low. And this tends to support the opinion of those who say there is a structural shortage.
The hike in nickel prices is increasing the supply of scrap onto the market. World trade in stainless scrap has risen by more than 1 million tonnes over the last four years. But so far this is not having a dampening effect on the price of nickel.