Indian stainless steel prices have experienced significant increases w-o-w due to two factors: the rise in LME nickel prices and consecutive price hikes by primary producers.
Furthermore, a leading stainless steel producer raised prices of finished coils across all grades by INR 2,000/tonne (t) in response to escalating raw material costs. This marks the third price hike in May 2024.
The rise in stainless steel prices can also be attributed to a gain in nickel prices on the LME, which rose by $1,540/t w-o-w. Nickel prices for 3-month delivery on LME saw a 8.5% increase, reaching $20,780/t, at the time of reporting. Notably, nickel stocks in LME warehouses upped 1.6% compared to the previous week, reaching 82,074 t.
The recent surge in nickel prices stems from multiple factors. Despite nickel oversupply, delays in Indonesian ore approval led to shortages. US and UK restrictions on Russian metal exacerbated supply issues, especially for nickel. INSG forecasts predict global demand to reach 3.45 mnt this year.
Additionally, economic resilience in the US and Eurozone spurred industrial activity, while civil unrest in New Caledonia disrupted local mining. This combination of supply constraints, geopolitical tensions, rising demand, market dynamics, and regional instability propelled nickel prices to unprecedented levels.
BigMint’s assessment of domestic stainless steel 304 HRC prices stood at INR 182,000/t ex-Mumbai and domestic 304-grade scrap was firm at INR 122,500/t ex-works Delhi.
Scrap market scenario
In the domestic scrap market, prices have edged up by INR 2,000/t in response to the uptick in finished prices. Offers of 304 scrap are ranging from INR 122,000 to INR 123,000/t ex-Delhi NCR, with cash payment terms. Sources noted that major mills are currently hesitant to purchase scrap due to elevated offers.
Meanwhile, major mills are refraining from booking imported material as well and are presently adopting a wait-and-watch approach, anticipating a potential price correction.
A trader informed BigMint, “The market is sluggish, with minimal bookings observed. Offers are highly volatile, ranging around INR 2,000 to INR 3,000/t on the higher end.”
This week, imported scrap prices saw slight rise in prices by up to $30/t, with BigMint’s assessment indicating prices for 304-grade scrap at $1,480/t, CFR Mundra.
As per a trade source, “Scrap suppliers are reluctant to sell material below $1,480/t to India, indicating a substantial bid-offer disparity in the market, with differences reaching up to $50-$60/t. Suppliers are achieving better price realisation in the European region, where bid levels are approximately $100-$120/t higher.”
Prices of 316-grade scrap were observed to be at $2,635/t CFR Mundra. Meanwhile, suppliers were offering levels higher than $2,650-$2,700/t due to limited supply of the material.
However, market demand and purchasing interest have stayed subdued. Furthermore, offers of 430-grade scrap obtained from nearby locations are available at $670-$690/t.
Finished flat segment
As per BigMint’s assessment, 304 HRC is priced at INR 182,000/t, up by INR 5,000/t, while 316 HRC stood at INR 314,000/t, ex-Mumbai, moving up by INR 6,000/t.
According to a buyer source, “The prices of finished material have been volatile, primarily driven by fluctuating LME nickel prices. Buyers are exercising caution, adopting a wait-and-see approach to better understand current market dynamics. Meanwhile, offers for finished material are ranging around INR 8,000 to INR 10,000/t on the higher end. The current market prices appear to be at manipulated levels.”
Meanwhile, imported offers of SS 304 HRC from China are currently at $1,930-$1,950/t CFR Mundra, India.
Finished longs’ indicative levels
In the finished long segment, price indications for 304 black round bars have been heard at INR 177,000-INR 179,000/t, exw-Delhi. Additionally, price levels for SS 304 bright bars were heard at INR 199,000-INR 201,000/t levels, ex-Delhi.
Indicative offers for SS 304 hexagon stood at INR 211,000-INR 212,000/t and SS 304 angles are at INR 204,000-INR 205,000/t, both ex-Delhi.
A manufacturer source said, “The surge in LME nickel prices and price hikes by primary producers have affected the longs product segment. Prices have risen by up to INR 8,000/t compared to the previous week.”
Meanwhile, offer levels for 316-grade black round bars were heard at INR 289,000-INR 291,000/t, ex-Delhi.
China market overview
During the week, China’s domestic stainless steel prices witnessed stability. Prices of 304 grade CRC reached RMB 14,400/t ($1,988/t) ex-works. FOB prices of 304 grade CRC stood at $2,081/t.
As per sources, China’s domestic Nickel Pig Iron (NPI) production remained limited due to maintenance and high nickel ore prices. Indonesian NPI exports faced hurdles due to a disruption in Indonesian mines, leading to a decline in NPI grade, with a decrease in metal content.
Raw materials scenario
Ferro molybdenum: In comparison to the previous assessment on 15 May, ferro molybdenum prices in India experienced a rise of INR 61,000/t ($733/t) w-o-w. Prices increased as there were reports of material shortage across the globe which got boosted by the rise in demand.
Indian ferro molybdenum prices were at INR 2,681,000/t ($32,197/t) exw-Nagpur on a 60% pro rata basis, as per BigMint’s assessment on 22 May.
Ferro chrome: Indian ferro-chrome prices (HC, FeCr60%) stood at INR 106,500/t exw-Jajpur. Prices witnessed a marginal drop of INR 100/t w-o-w.
Global updates
- Indonesian Ni smelters turn to Philippines
Indonesian smelters are reportedly increasing their stock of raw materials from the Philippines due to limited nickel ore availability domestically. While there are reports of gradual progress in the issuance of mining licenses in Indonesia, the challenge of obtaining Indonesian ore is expected to persist.
- European SS surcharge to surge for June’24
Stainless steel alloy surcharges by European mills for June 2024 are set to see significant hikes, driven by notable increases in molybdenum and nickel prices. Nickel prices surged over 10% compared to the previous month, while molybdenum prices are also expected to rise further, affecting stainless steel grades like 316L.
Outlook
The current market conditions suggest that prices may either continue to rise or experience a slight correction. However, the fluctuations in LME nickel prices have contributed to market uncertainty.