Daily Nickel Prices & Stainless Steel Market Pricing

Worldwide Metal Market News

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May 2004

For archives and translation, see bottom of this page

5-28

LME nickel bucked the trend of most metals hit by pre-weekend profit taking, and gained to close at $5.53/lb.
*   Weekly Round-up - Nickel rose this week for a number of reasons. First, the dollar fell against the Euro and was at an eight week low yesterday. A weak dollar is good for metals. Second, Norilsk had to shut down shipments for the annual floods on the Yenisei River. While an annual event, the tight market is nervous about the extent of this closure and the impact it will have on inventories. Speaking of inventories, our number 3 reason is LME inventories have fallen for about 2 weeks straight now, falling below the 12M tonne mark yesterday. Fourth, investors that panicked that China was shutting down shop a few weeks ago, are now realizing the efforts to slow the economy seem to be slow and gradual, meaning China will still remain a large consumer of nickel. And finally, economic news from various regions of the world remain strong, meaning nickel consumption will continue to grow strongly. While estimates of the world deficit have fallen since the beginning of the year, the anticipated market still remains in the deficit.  
*   US metals markets close at noon today, and LME will be closed Monday for the holiday weekend.
*   On Wednesday,. Inco announced that its new Goro Nickel Mine startup date had been pushed into 2007. Originally planed for a 2006 opening, this new delay is making traders nervous about an already tight nickel market, with the Goro opening the first large new mine to potentially alleviate a deficit situation. While we expect the initial impact off this announcement to be minor, it does have the potential to keep the world in a deficit situation longer than orgianlly thought, which could keep nickel prices up through 2005, and now potentially, 2006. Good news for nickel stock holders but not good news for stainless steel users.
*    LME nickel inventories fell to 11,844 tonnes yesterday. This is not going to help bring nickel prices down, with the world's largest producer not shipping due to a closed port and annual spring floods.
*    While every nickel mine has its own production costs, we saw one estimate this week that the average cost to produce a pound of nickel is approximately $2.41/lb.
*    Steel fastener buyers shouldn't expect to see prices come down anytime soon. China Steel Corp just announced new price increases in steel wire for June.
*    South Africa, the world's largest supplier of ferrochrome, announces it will double production this year to an estimated 120M/tonnes.
*    LME nickel opened the morning at $5.44/lb.

5-27

LME nickel ended the trading day at $5.49/lb. It appeared stainless steel prices should be coming down... this recent increase of nearly 10% in a few weeks, while lower than earlier high's, will give steel makers reason to keep stainless prices up.
*   LME nickel inventories fell to 12M tonnes yesterday and traders are noticing.
*   Carpenter Technology raising prices on all stainless steel products by 3-10% effective June 1st. Also adding manganese to surcharges.
*   LME markets were at $5.31 in early trading.

5-26

LME nickel ends the day at $5.30/lb.
*  Posco of South Korea is advising China shouldn't be counted out when it comes to stainless consumption and it estimates nickel will probably stay in its current price range for the remainder of the year.
*  Scrap Magazine is reporting Jim Lennon of Macquarie Research told those attending a scrap convention last week that he thinks the current dip in nickel could be temporary and still estimates pricing to average $6.25/lb for the year.
*  LME nickel inventories continue to slide - now nearing 12M/tonnes.
*  LME markets opened with nickel selling for $5.33/lb.

5-25

LME nickel ended the trading day at $5.27/lb.
*   LME nickel opened higher this AM...at $5.30/lb. Prices fell shortly thereafter.

5-24

LME nickel closed off its earlier high's as rising oil prices brought profit takers to the floor. Inco also reported no disruptions in supply were expected in Indonesia. Closed at $5.27/lb.
*   LME nickel stocks fall for 7th straight day, at 12,636/tonnes.
*   Oil prices back up - barrel only 12 cents cheaper than 21 year record high hit MOnday last week.
*  Various news agencies are reporting some Canadian and Australian workers have left the Indonesian mine and Canadian and Australian embassies have issued travel alerts for Indonesia.
*  Another factor driving the nickel price higher is being reported by Bloomberg. Inco's International mine workers in Indonesia have received death threat's, possibly from Islamic militants. Hundreds of Indonesian police have been sent to the area to guard the mine and Inco has offered expatriates the option to leave. With shipments from Norilsk halted due to floods, the market can not risk any further disruptions in an already tight supply.  
*   Rescue units in Russia's Siberia have been placed on flood alert as the Yenisei River has exceeded the critical level and continues to rise.
*   Man Metals Research is reporting nickel imports into China have fallen 47% so far this year, compared to the first 4 quarters of last year. During the same period exports of nickel from China have increased 107%. This has helped stabilize nickel prices during the last few months.
*   LME nickel opened strong this AM, selling at $5.36/lb.

5-21

Nickel had the buyers sentiment today as news from Norilsk, along with a falling dollar, led LME nickel upwards; the London market closing their trading day at $5.24/lb.
*   Barrel of oil costs $39.90 today, compared to a record high $41.85 on Monday.
*   Molybdenum oxide continues to fall, although still well over 2003 levels - at $12.25/lb.
*   Well - we were right - for a moment. After we predicted the rally wouldn't last, nickel dived. Now its spiking again because Norilsk, the world's largest supplier of nickel, announced a few moments ago they were shutting down shipping in anticipation of the annual floods at their port in Dudinka. This is an annual occurence, as ice breaks up on the Yenisei River, and stops shipments for 30 to 45 days. Low LME nickel inventories, with this disruption in supply, are making traders nervous.
*   Nickel on the LME opened up this morning, selling at $5.17/lb. This came on the heels of news from China that stainless steel consumption was only expected to rise 10% in China this year, compared to 31% last year.  According to Reuters, Li Ching, executive president of the Stainless Steel Council of China Special Steel Enterprises Association is making this gloom prediction. We don't expect this price rally will last long.

5-20

As the world celebrated Ascension Day today, LME nickel prices seemingly symbolically paralleled the story of the holiday. Early morning trading saw profit taking , with nickel prices experiencing a slow death - falling to $4.85/lb. Then investors jumped in, resurrecting the price. Within hours nickel had climbed to a weekly high of $5.03/lb. After peaking the market returned to normal, closing where it did yesterday - at $4.99/lb. (ok, I tried to make it work)
*   LME nickel inventories fall below 13M/tonnes
*   As we mentioned in April, and officially beginning on April 28th, Canadian officials have begun a 60 day anti-dumping investigation of stainless steel fasteners into Canada from Taiwan and China. The original complaint was filed by Leland Industries. The interesting part of the official statement includes a paragraph stating that if they find sufficient evidence of injury, they hold the right to impose retroactive duties to the April 28th date. For those purchasing and selling stainless steel fasteners in Canda, stay tuned.
*   LME nickel opened lower this morning, opening at $4.91/lb.

5-19

LME nickel took a short bounce today after China's vice president was quoted as stating the Chinese leadership would continue to encourage economic development and promote stabile monetary policies. The governor of China's central bank also denied that immediate interest rate hikes were planned. Traders were encouraged that the Chinese economic slow-down may not be as dramatic as first feared, and jumped into the market, with nickel closing the day at $4.99/lb. LME nickel inventories continue to decline.
*   War in Iraq cost to date here. Tribute to the 790 soldiers who have given their lives so far.
*   Nickel opened LME trading at $4.90/lb

5-18

LME nickel strengthened a little today, ending the London trading day at $4.90/lb.
*   For you steel buyers, the steel makers are still playing games with your numbers. AK Steel advised today it was lowering the surcharge by 4$/ton next month, but, will raise the transaction price by $50/ton. Nucor Steel announced earlier that it was cutting next month's surcharge by $25/ton but increasing the base price by $20/ton in July.
*   Sympathy for traders in nickel market appears to be very negative, which is good news for stainless steel users in the long term. One thing that is worth watching is LME inventories of nickel, which are seeing consistant drop's. Yesterday they fell to 13,448 tonnes. Two months ago, this would have been seen as further proof of the predicted world deficit in nickel production and raised nickel pricing. Now with sentiment so nervous about China's attempt to slow its economy, terroism threats, record high oil prices, and US interest rates, this negative seems to be forgotten. Stay tuned, but as of today, stainless steel prices appear to have peaked. With molybdenum still high, there remains room for 316 stainless steel prices to see potential further increases.  
*   South Korea's largest stainless steel producer announces cuts in 300 series stainless of 8%, effective on new orders taken as of tomorrow.
*   Reuters is reporting an official from one of China's first stainless steel producers, as warning the stainless steel market in China is showing signs of a definite slow-down.
*   LME nickel opened lower this AM, opening at $4.76/lb.

5-17

LME nickel took a beating today as copper dragged down all other metals. It ended the day at $4.79/lb. Invesotrs are nervous as China is selling a lot of copper on the world market, leading some to believe China is lowering their raw material inventories.
*   China's central bank is warning investor's that investment in China's iron and steel industry soared by 107.2% in the first quarter of 2004, and 96.6% in 2003. It also warns then when all these projects are complete, China's supply could exceed demand. US steel makers are already watching China wearily, with fears a government forced slow-down in the Chinese economy, could re-introduce cheaper import steel into the US market.
*   International Stainless Steel Forum reporting worldwide crude stainless steel production increased 10.4% in 2003, compared to a 7.8% increase in 2002. They are also forecasting an additional 6.8% increase for 2004. The ISSF sees no forseen supply risks ands states the price increases in nickel earlier this year was unjustified.  Nearly 72% of stainles steel produced in the world is 300 series stainless, with 400 series making up nearly 21% and most of the the balance 200 series. Duplex stainless makes up less than 1/2 of 1%. 
*   Expect higher electric rates this year, as coal prices increase hit 25% over last year.
*   LME nickel opened lower this morning, asking price at $4.85/lb.

5-14

LME nickel closed the week at $4.91/lb.
*   According to the American Iron and Steel Institute, American steelmakers shipped 8.6% more in the first quarter of 2004, than in the preceeding year.
*   LME nickel opened at $4.87/lb this AM. Traders await economic news from the US and a possible increase in the interest rates in China.

5-13

LME nickel took a beating again today, ending the trading day at $4.87/lb. As seen above, late nickel trading continued to slide. Justified or not, there is a lot of pessimism surrounding nickel at the moment. Good news for stainless steel buyers.
*  The Financial Times is reporting nickel imports into China have fallen, due in part, to the closing of nearly 3,000 electroplating workshops (nearly 20%) who could not remain profitable when nickel prices soared.
*  LME nickel opened this morning at $4.89/lb.

5-11

LME nickel spent most of the day in the $5/lb range until the end of the day, when it plunged and closed at about where it did yesterday at $4.80/lb.
*   One of the world's large producer's of low carbon ferrochrome in Zimbabwe has shut down 3 of its 6 furnaces in a dispute with its government over foreign exchange regulations. 
*   Chinese business publications are stating steel prices for construction projects have fallen approximately 17% in the last 6 weeks, although they are still about 30% higher than last year.   
*   LME nickel opened higher this morning, quoted at $5.11/lb at 7 am CST.
Molybdenum was selling at $13.25/lb yesterday, down from last month's $16.25 but still nearly double what it was this time last year. 316 users can expect further increases.

5-10

LME nickel closed slightly higher, after a see-saw day that saw pricing hit a seven month low for a moment. Closed at $4.83/lb but late trading is up.
*   AK Steel joined the crowd today, announcing it is increasing prices on all 200, 300, and 400 series stainless steel  sheet, strip and plate by approx 6% effective May 17th.
*   An East Jordan, Michigan foundry was stunned to find a live World War 1 aerial bomb in the pile of scrap they had purchased. US Army bomb disposal personnel were called in to remove it.
*   The Record of Hackensack is reporting highway guardrails are mysteriously disappearing at night, with salvage thieves sawing thru the fasteners and making off with several miles of the aluminum rails. Besides the cost of replacement, New Jersey officials are concerned about motorist safety.
*   For users of stainless steel, a slow-down in China will be good news for 2 reasons. First, the metals used to make stainless will show less of a demand, and prices will drop (we've seen this in the last few weeks on the fears by investor's of this). Secondly, while China is the largest user of stainless steel in the world, it is also one of the leading importers. In 2003, of the 4.2 million tons of stainless it used, 2.9 million tons of this was imported. Countries like Japan, India, Korea, Taiwan, etc are reaping the benefits of this sizzling economy. If it slows, these countries will look elsewhere to sell their surplus stainless, which could bring world prices down hard. Steel producers are reaping the benfits of high prices and low inventories today, but the road ahead may be far less profitable for them.
*   Special thanks to Kitco Metal for allowing us to provide the above "live" price chart of LME nickel trading, and Mr Powers, CPA and metals investor from Dallas, TX for introducing us to this site.
*   The Hindu Business Line is quoting Barclays Capital, in its  latest report, Base and Precious Metals, as predicting metals prices may slip another 10-20%, but caution the bull run may not be entirely over.
*   After early morning trading dipped LME nickel as low as 4.76/lb, prices had returned to $5.03/lb by 7 am CST.

5-7


And our last entry for the week. High mineral prices got you down? Well look at the bright spot... your body is worth a little more if you ever want to scrap yourself. The average human body contains approx 9 milligrams of molybdenum, 10 milligrams of nickel, and between 3 and 5 grams of iron ore. We'll leave the magnetic personality and plug nickel jokes to someone else.

Nickel prices were stalled most of the day and then got erratic by day's end. LME nickel ended the day and week at $4.96/lb.
*   One Forbes analyst says sell your mining stocks - her article here. On the other hand, Jubak of MSN Money says long term, nickel is still a good bet. His column here
*   SSINA is reporting a healthy increase in the use of stainless steel in the US as of February 2004. Figures released today and reported by Yahoo News, show overall stainless steel product lines increased by 7% from this time last year, with stainless plate increasing by 31%, while consumption of stainless bar and rod fell by 10%. Overall import penetration into the US market fell, potentially reflecting the heavy Chinese demand.
*   LME nickel stocks fell for the third day, shedding 764 tonnes to 14,862 tonnes.
*   Norilsk Nickel announces profits increased from $330 million during the first quarter of last year, to $600 million this last quarter. Norilsk produces approximately 20% of the world's nickel.
*   LME  nickel was selling at $5.02/lb this AM.

5-6

After original fund buying, profit taking set in after positive employement figures from the US bumped up the dollar. LME nickel prices fell to close at $5.01/lb.
*  (Commentary) While it has yet to return to its early 2003 level's, nickel has fallen substantially from its January 5th high of $7.76/lb. Since nickel accounts for up to 60% of the cost of stainless, we wonder if the most recent price increases by the steel-makers are an attempt to "get it while the gettin's good". Further increases in 316 are to be expected with the volatility of molybdenum, but 304 should be dropping, or at the very least, have stabilized. History has taught us, that inevitably someone will be forced to blink, and only then will we see stainless prices head downward. In the mean time, the consumer will suffer. This could also explain why oil prices are at a 13 year high, but the price you are paying at the pump is an all time record high.
* Allegheny Ludlum announces 6% price increase on hot and cold rolled sheet and strip effective May 17. This came shortly after Universal Stainless announced a 4% price increase on all bar products effective May 15th.    
* LME nickel jumped early this morning on fund buying, climbing as high as $5.20/lb, but has since softened to $5.08/lb.

5-5

LME nickel ended the trading day at $5.05/lb.
*  Scrap dealers in Poland report business is brisk with the higher prices and are seeing everything from handrails, parts of phone booths, manhole covers, traffic signs, and even crucifixes and efficigies of Christ stolen from cemeteries, being turned in for cash. South Carolina police are investigating the theft of over $30M worth of road signs, that had yet to be installed. Police in Great Britain are experiencing the theft of installed road signs and fear that motorists are being put at grave risk.
*  February issue of Monthly Labor Review projects job growth over the next 8 years in machine shops, turned products, and nut, bolt and screw manufacturing to add 15,000 jobs (less than 1% per year).
*  LME nickel is struggling this morning, repeating yesterday's morning bounce, and is currently at $4.96/lb.

5-4

Nickel ended today's trading at $4.92/lb.
*   LME markets re-opened this morning after a 3 day weekend and nickel is looking for direction. After an initial slump, and then a slight jump up, prices are currently at $5.10/lb.

5-3

*   New York Times writes on the double edged sword of a Chinese steel slow-down here.
*   Institute of Supply Management released its April Report on Business with a PMI at 62.4%. It also reported the country has completed 11 consecutive months of growth in the manufacturing sector, and 30 consecutive months of overall economic growth. Listed among commodities in short supply - Fasteners, for the second month. Stainless Steel, for the seventh month. For the complete report, visit here
*   Molybdenum dropped to $13.75 last Friday, from $15.60 the week prior. While down, these prices are still nearly 4X higher than early 2003. Don't expect to see 316 stainless prices dropping in the near future, though higher pricing is a safer bet.
*   Norilsk Nickel's Vladimir Potanin is in the news again. After rumors surfaced last week, that he had been arrested, Norilsk stock plummeted, losing $2 billion dollars on paper in one day. While it turned out the rumor was false, Potanin may have recently "crossed the Kremlin line" with the African gold mine deal (we mentioned last month), and a lot of Russian press are now predicting his days may be numbered.
*   LME markets are closed in celebration of International Labour Day


4-30

LME nickel ended the day, week and month at $5.06/lb.
Activity next week is expected to be light as much of the world will celebrate holiday's. May 1st is International Labor Day, and is celebrated in most of the world - the US celebrates Labor Day on September 1st.
*   For all you U.S. steel buyers, here is your salesman's next excuse for raising your price - Venezuelan steelmaker Sidor has been on strike for 8 days and announced today it will be forced to suspend all shipment's until the strike is over.
*   Phelps Dodge reported earnings of $185 million for the last 3 months, compared to a loss of $15 million during the first 3 months of 2003.
*   Norilsk Nickel announced today that its 1st quarter profits had increased to $597 million, up from $328 million the quarter before.
*   Reuters is reporting that China has ordered all development projects to be reviewed and that some may be cancelled. It also quotes the Xinhua news agency as reporting "no new steel, aluminum or cement projects would be approved this year."  
*   Scrap prices eased in April, relieving some of the cost pressure on U.S. steel manufacturer's. Coke, which remains in short supply due to export limits from China, also has seen prices come down a little. Analyst's are split on the near future of steel prices. Some believe the price spike still has not been reached, while others feel prices will moderate over the next few months.
*   LME nickel is trading softly this morning, falling back to $5.08/lb.

Photo courtesy of Moscow News

What was once a 90 meter tall radar tower at a top secret Russian military installation is now scrap metal in our most recent and ongoing example of what people will steal to sell for scrap during this metal crunch. For details, visit our daily archives.

From manhole covers to complete steel bridges, from aluminum stadium seats to copper conduit, if it isn't guarded closely, there is a chance it might disappear.


May 2003 comparison figures
Average LME nickel price - $3.78/lb

Allegheny Ludlum Surcharges for May

1 1 Nickel Chrome

Moly

Iron

2003
2004

304

.173
.4056

.0085
.075

NA

0
.0514

2003
2004

316

.2163
.5069

.0076
.0666

.0369
.1464

0
.05

arrow denotes price comparison to prior month

courtesy Allegheny Ludlum

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