Nickel Steady, Copper Slightly Up; Strong Demand in SS 200 Series Observed

Price

• LME's Nickel opened today unchanged at $16,700/ton, while Copper increased by 0.10%, opening at $9,298/ton.
• The INR opened today against the USD at 83.84.
• The current retail price for 304 CR wider 2B is approximately Rs. 198-201/kg (basic price, ex-Delhi), while the narrow version is 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 more expensive by Rs. 5-10/kg. For CR wider, 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 (the cheapest grade) is now being retailed in the range of Rs. 140-143/kg base price (plus thickness difference extra), plus GST.

Demand and Supply

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

News

• India is reviewing its seven-year-old National Steel Policy (NSP) due to increasing global pressure to decarbonize the steel industry and the introduction of carbon pricing measures by advanced countries like the EU. The NSP targets a rise in crude steel production to 300 million tons by 2030, up from 143 million tons in fiscal 2024, reflecting a 12.6% increase from fiscal 2023.
• China's Ministry of Industry and Information Technology (MIIT) announced on August 23 that all new steel capacity replacement programs are to be halted. Regions must immediately stop announcing new capacity replacement plans, or they will be considered regulatory violations. The MIIT will collaborate with relevant parties to expedite the review and revision of steel capacity replacement methods, ensuring enhanced policies and measures for future implementation.
• The Federation of Automobile Dealers Associations (FADA) reports an oversupply of 700,000 unsold passenger cars in India's automobile industry, valued at US$8.7 billion. This inventory surge led Maruti Suzuki India Limited (MSIL) to cut production. Despite a 7.4% production increase in Q1 of fiscal 2024-25, sales only rose by 1.2%. Factors include weaker demand due to national elections and adverse weather, prompting MSIL to adjust production ahead of the festival season.
• U.S. housing starts dropped to a four-year low in July, decreasing by 6.8% to an annual rate of 1.2 million units, the lowest since May 2020. Building permits, a key indicator of future construction activity, also fell by 4% to 1.4 million units annually. Mortgage rates slightly decreased to 6.54% for a 30-year fixed mortgage, down from 7%. Despite these challenges, a potential Federal Reserve rate cut in September could boost housing demand.
• South Korea's shipping container costs to the U.S. and Europe surged for the third consecutive month in July. The average shipping cost for a 40-foot container to the U.S. east coast increased by 28.1%, while costs to Europe rose by 39.2%. Shipping to the U.S. west coast saw a 20% month-on-month rise, marking the fourth straight month of increases, according to data from the South Korea Customs Service.
• Maersk, Lloyd's Register, and Core Power are collaborating to explore the feasibility of using nuclear power for container ships. The study will investigate the infrastructure, technology, regulations, and safety measures required for nuclear-powered cargo operations in Europe. This initiative aligns with the International Maritime Organization's (IMO) goal of achieving net-zero emissions from international shipping by 2050, as well as the EU's 2025 carbon regulations for shipping companies.
• The World Steel Association reported a 4.7% year-on-year decline in crude steel production across 71 countries in July, totaling 152.8 million tons. China, the largest producer, saw a 9% decrease, while India increased output by 6.8%. Japan, the U.S., Russia, and South Korea experienced declines. However, Germany, Turkey, and Brazil saw production growth, with Brazil recording an 11.6% rise. Overall, global steel production fell by 0.7% in the first seven months of 2024.

Expert's Opinion

• Both 304 & 316L are expected to have a medium run this week, owing 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 in ferritic grades.