LME Nickel and Copper Prices Drop, Stainless Steel Market Stable

Price

• LME's Nickel opened today down by 0.39% at $16,790/ton, while Copper opened today down by 0.18% at $9,243/ton.
• The INR opened today against the USD at 83.97.
• The current retail price for 304 CR wider 2B is approximately Rs. 198-201/kg (basic price), ex-Delhi. The price for narrow variants is approximately Rs. 3-5/kg cheaper, plus GST.
• SS 316L imported material is now retailing at Rs. 317-321/kg for HR wider. Indian material is more expensive by Rs. 5-10/kg. For CR wider, the rates are Rs. 10/kg higher than HR. SS 201 imported CR 2B (extra low thicknesses like 0.26mm) is retailing at Rs. 143-148/kg, ex-Delhi, plus GST. Domestic 201 (the cheapest grade) is now retailing at Rs. 140-143/kg base price (plus extra for thickness), plus GST.

Demand and Supply

• Demand is nearly equivalent to supply in 304 & 316L (both CR & HR) in generic sizes.
• There is little demand for ferritic grades, whether 430 for cutlery/utensils, 409M for railway grades, or 409L for the automotive segment.
• Strong demand is observed in 201 grades, including Holloware, Pipe & Tubes, and General Fabrication.
• Decent demand is also seen in 304 narrow sizes for applications like pipes and tubes or rerolling usages.

News

• USA Stainless Steel CR Coil Market: As of August 16th, the USA Stainless Steel CR Coil Market saw a price rise of 0.2%, driven by increased production and price hikes from steelmakers like Nucor. Despite limited transaction activities, there is general acceptance of higher prices, indicating cautious optimism. Cleveland-Cliffs' strategic pricing aligns with industry trends, suggesting a shift in supply strategies to match current conditions. Demand remains stable, with the automotive sector significantly impacting prices.
• UK Economy Growth in Q2: The UK economy expanded by 0.6% in Q2 2024, following a 0.7% increase in Q1. Industrial production rose by 0.8% in June, continuing from May’s 0.3% growth. Retail sales improved in July, reversing a 0.9% decline in June to a 0.5% increase. These positive indicators suggest economic expansion, particularly benefiting small caps, which are more sensitive to domestic economic developments.
• India's Steel Product Exports Decline: In July 2024, India's steel product exports dropped to an eight-month low, decreasing by 15% from the previous month. Europe remained the primary destination, but volumes have declined since February. India has lost market share in Vietnam and the Middle East since May due to China's competitive pricing in resources, further impacting export performance.
• Global Nickel Market Oversupply: According to the World Bureau of Metal Statistics, global refined nickel production in June 2024 totaled 281,800 tons, exceeding consumption by 1,500 tons. In the first half of 2024, production reached 1.683 million tons, with a surplus of 42,100 tons. Nickel ore production also exceeded consumption, with a total of 1.7 million tons produced during this period, highlighting ongoing oversupply in the market.
• Outokumpu's Q2 Performance and Challenges: Outokumpu’s Q2 2024 performance showed improved profitability compared to Q1, though challenges persist in the European market. The CEO emphasized the need to enhance cost competitiveness in commodity stainless steel production, particularly in Finland and Germany.

Expert's Opinion

• The 200 series remains strong, benefiting from the scarcity of imported products in the market.
• Both 304 & 316L are expected to have a moderate performance this week due to the decrease in raw material prices.
• The 400 series continues its dull run, owing to the lack of demand in ferritic grades.