Nickel and Copper Prices Drop; Stainless Steel Demand Remains Mixed

Price

• LME's nickel opened today down by 1.13%, at $16,605/ton, while copper opened down by 0.36%, at $9,219/ton.
• The INR opened today against the USD at 83.85.
• The current retail price for 304 CR wider 2B is approximately Rs.198-201/kg (basic price), ex-Delhi, while the narrow variant is approximately Rs.3-5/kg cheaper, plus GST.
• SS 316L imported material is now being retailed in the price range of Rs.317-321/kg for HR wider. Indian material is Rs.5-10/kg more expensive. For CR wider, the rates are Rs.10/kg higher than HR. SS 201 imported CR 2B (extra low thicknesses like 0.26mm) is being retailed at Rs.143-148/kg, ex-Delhi, plus GST.
• Domestic 201 (cheapest grade) is now being retailed in the price range of Rs.140-143/kg base price (plus thickness difference extra), plus GST.

Demand and Supply

• Demand is almost equivalent to supply for 304 & 316L (both CR & HR) in generic sizes.
• There is not much demand for ferritic grades, whether it is 430 for cutlery/utensils, 409M for railway grades, or 409L for automotive segment grades.
• Good demand is being observed in 201 grades, particularly in Holloware, Pipe & Tubes, and General Fabrication.
• Decent demand is also being observed in 304 narrow sizes, for applications like pipes, tubes, or rerolling uses.

News

• Nickel Prices and Market Dynamics: On August 16, LME nickel futures rose by $54/ton to $16,373/ton, while spot prices increased by $60.5/ton to $16,130/ton. LME nickel inventory remained flat at 114,060 tons. The futures price saw a weekly gain of $223/ton (1.4%). Anticipation of a US Federal Reserve interest rate cut weakened the US dollar, driving up nickel prices alongside rising nickel ore and strong ferronickel prices.
• Japan's Steel Industry Challenges: Japan's steel industry is facing stagnant demand, with minimal changes in sales performance across regions. A survey of major distributors and coil centers in - - - Tokyo, Osaka, and Nagoya highlighted ongoing struggles in construction projects due to stricter labor regulations in 2024. These regulations have led to reduced working hours and project delays, particularly in public and private construction, keeping logistics for materials like rebar and thick plates sluggish.
• AHMSA's Bankruptcy and Investor Interest: Mexico's largest steelmaker, Altos Hornos de Mexico (AHMSA), is entering bankruptcy after failing to reach an agreement with creditors. AHMSA is actively seeking national and foreign investors to capitalize the company, with two potential investors already conducting due diligence. The company needs at least $900 million to restart operations and pay debts to Pemex, the Federal Electricity Commission, creditors, and workers. Ongoing discussions involve seven potential investors.
• NPI Price Trends and Production: The weekly average price of high-grade NPI dropped by 0.3 yuan/mtu, while the Indonesian NPI FOB index slightly increased. Domestic smelters in China saw improved profits and production, whereas a new production line in Indonesia is still ramping up amid tight nickel ore supply. Despite a modest recovery in stainless steel production, low spot prices have led to reduced marginal profits and lower procurement prices, particularly in South China.
• Western Efforts to Reduce China’s Copper Dominance: Western countries' attempts to reduce reliance on China’s copper supply may hinder the energy transition and raise costs, according to Wood Mackenzie. China dominates key segments of the copper supply chain, crucial for renewable energy, energy storage, and electric vehicles. As the U.S., Canada, Australia, and Europe seek alternatives through subsidies and investments, they face the challenge of balancing decarbonization goals with reducing dependence on Beijing.

Expert's Opinion

• Both 304 & 316L are expected to have a medium run this week due to the raw material price decrease.
• The 200 series is still performing strongly due to the lack of imported products in the market.
• The 400 series continues its dull run due to the lack of demand for ferritic grades.