Stainless Steel News and Nickel Prices, Molybdenum, Metal Pricing, Ferrochrome

$11.25/lb

($24,800/tonne). Indicators at 6:00 am CST today show nickel trading around $.27/lb lower, although must of this drop was seen in the immediate hours after closing yesterday. Stockpiles of nickel stored in LME licensed warehouses fell on Thursday and ended that session just under the 80,100 tonne level. For those who might question our earlier assessment that China would likely not take part in any sanctions against Russia, Bloomberg is now reporting that they have said as much

(see story below)

. China is blaming NATO expansion concerns as justification for the Russian aggression, in what may be a  ‘I scratch your back, you scratch ours’ when it comes to Taiwan later.  These two countries will never become besties, but they can do a lot of damage to the rest of the world during their uncomfortable partnership. So what does all of this mean for nickel and stainless steel? Yesterday was a knee jerk reaction and trades based off fears of the unknown. Traders like to have a sense of what will happen tomorrow and when that is gone, volatility takes center stage. Nickel rose to $26,000/tonne yesterday on news of the Russian invasion of Ukraine, but four hours later, was trading back around the $25,000/tonne level, and two hours later, in mostly after market trading, had lost another $600/tonne and was trading about where it ended Wednesday. Prices are going up, especially oil and gas, that’s pretty much a given. Does the Fed now have cover to keep rate increases in check? Will inflation continue to rule the day, or will a slowdown in world economies slow down inflationary pressures? The EV industry does not appear to be old enough, in our opinion, to be too vulnerable to getting hurt by an economic slowdown and skyrocketing fuel prices could become the best sales tool the EV industry has to offer. The stainless steel industry is more vulnerable to a global slowdown, but even that would take some time to see, if it was too happen at all, as many producers are still behind filling current orders. The danger for the middle men, the stainless steel distributor, has always been a sharp drop in prices at the same time there is a potential slowdown in demand. Nothing worse than over priced inventory and competitors willing to loose money to dump high priced stock. savvy distributors can make good money as nickel and stainless steel prices climb, but when the opposite happens, it takes the savviest distributor to weather the storm. Having said that, we do not see that happening any time soon. Prices may come down a bit on market uncertainty, but there is little reason to see any significant drop. Nickel fundamentals remain strong, so we don’t really see nickel experiencing anything beyond a possibly correction. We were trading around the $20,000 tonne level at the beginning of the year, eight weeks ago, and closed at $24,800 yesterday, so there is plenty of room for a “correction” without entering a bear market. As long as LME stockpiles keep dropping, any potential market correction would likely be minor. Off the subject of nickel and Ukraine, but still interesting to those of us who marvel at the 21st century growth of China, we quote from an article linked to under “Other News”. ”

China started building 33 gigawatt’s (GW) of coal-fired power producing capacity in 2021, almost triple the world’s combined capacity, according to a report

.” and ”

Steel mills approved 74 million tonnes of coal-based capacity last year, adding in 12 months what the rest of the world put together on average in five years, the report said.

” These decisions will not help them reach any Climate Change goals, but last fall’s power shortages, revealed a vulnerability, and they are taking steps to rectify the situation. Making nice with coal rich Australia would be a recommended second step. Although lower this morning, nickel is quiet as traders take a wait and see attitude. We are still treading in unknown waters, so any news headline could put volatility back in control, with wild swings in either direction a distinct possibility. It’s the weekend and February is about over. For those of you who are not fans of cold weather, March usually offers a ray of hope of warmth ahead. And if you like cold weather, Australia is nearing their fall. Stay safe out there and have a great weekend.

($24,090/tonne)