Nickel Price Decline Sparks Uncertainty In The Indian Stainless-Steel Market: Will Prices Soften Or Hold Steady?

The Indian Stainless-steel market has experienced relative stability in recent weeks, but the declining Nickel futures have raised concerns about a potential softening of prices. The uncertain market conditions have led to a cautious approach among participants, resulting in low to moderate demand from major Stainless-steel producers. In this article, let’s examine the impact of declining Nickel prices on the Stainless-steel market and explore the potential outcomes for industry players.

Market Update

• Stability Yet Uncertainty- Despite some stability in the Indian Stainless-steel market on a weekly basis, due to the Nickel price decline a sense of uncertainty and risk has been developed among participants. The lack of clarity in the market has prompted industry players to adopt a wait-and-watch approach, OfBusiness assessed.

• Sellers’ Hesitance- As a result, sellers are hesitant to offer materials at lower prices, while buyers anticipate further price declines. This cautious sentiment reflects the market’s apprehension about the future direction of Stainless-steel prices.

Latest Prices

• London Metal Exchange (LME)- The London Metal Exchange (LME) Nickel prices have witnessed a significant drop of nearly $3,000/ton in the last 10 days. The fresh price for Nickel is now around $21,120/ton CFR Hamburg, Europe. This decline in Nickel prices has had an impact on the retail prices of Stainless Steel.

• 304 CR 2B- Rimjhim, a prominent Stainless-steel producer, currently offers SS 304 CR 2B at Rs. 206/kg, whereas Jindal is offering it at Rs. 220/kg (for wider) and Rs. 216/kg (for narrow).

• 304 HR N1- The retail price for Jindal’s 304 HR N1 stands at Rs. 207/kg basic, while Rimjhim offers it at Rs. 196/kg.

• Jindal’s 316L HR N1- It is priced at Rs. 353/kg.

• Jindal’s 316L CR 2B- It costs Rs. 365/kg.

The above prices have remained stable following the MOU discounts released by major Indian Stainless Steel producers last week.

• Imported CR Variant SS 201 J2- It is currently retailed at Rs. 127/kg, with No.4 PVC finish at Rs. 130/kg, and No.8 mirror finish at Rs. 140/kg, all prices being FOR Delhi (plus GST).

• Rimjhim’s 201/202/RT Grade is offered at Rs. 124/kg, FOR Delhi basis.

Jindal Stainless’ Strong Performance

India’s largest Stainless-steel company and one of the top 10 companies in the world- Jindal Stainless, recently announced its quarterly and yearly results for the period ending in March 2023.

• Highest Sales- The company reported its highest quarterly sales in Q4 FY23, driven by growing demand from end-user industries in the domestic market. In Q4 FY23, Jindal Stainless achieved an 8% quarter-on-quarter sales growth, reaching 508,000 tons. Moreover, the company recorded a 6% growth in FY23 compared to FY22, with sales totaling 1,764,000 tons.

• Growth Drivers- According to the company’s report, continuous agility in sales and operations planning, digitization, dynamic product mix, and research and development (R&D) efforts have played a vital role in Jindal Stainless’ robust performance.

Market Outlook

Given the sluggish global trends and limited prospects for significant price improvement, industry experts believe that maintaining stock levels in line with order books will be beneficial. Consequently, demand is expected to remain low, which may prompt major suppliers, including importers in India, to offer MOU and lifting discounts to improve trade deals.

OFB’s Insight

Declining Nickel prices have raised concerns about a potential softening of Stainless-steel prices in the Indian market. The uncertainty has led to a cautious outlook among participants, resulting in low to moderate demand.

The decline in Nickel prices has had an impact on the retail prices of Stainless Steel, although major Indian Stainless Steel producer Jindal Stainless reported strong sales growth in Q4 FY23. Given the sluggish global trends, maintaining stock levels, and offering trade discounts to improve deals may be crucial to stimulate demand in the future.

Read more: Domestic Steel Prices On The Rise- Checkout The Latest Updates

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