Nickel Price Fluctuations Impact Stainless Steel Market

The global Nickel market is experiencing a significant supply glut. Most of this Nickel is coming from Indonesia, the world’s biggest producer, followed by the Philippines, Russia, New Caledonia, and Australia. This oversupply and concerns about slowing demand for Nickel are expected to affect the Stainless-steel industry. In this article, we will understand how. Let’s get started:

Current Market Scenario

• Supply Surplus- The current Nickel surplus is projected to exceed the 100,000 tons reported in 2022. This increase is primarily due to the ramped-up production in Indonesia, which has been focusing on expanding its mining and smelting capacities to meet global demand.

• Demand Concerns- A key driver of Nickel demand is its use in electric vehicle (EV) batteries. There are concerns that some of the biggest EV companies are facing weak demand this year. As a result, the growth rate of Nickel demand may slow down, further exacerbating the supply glut situation.

Affect On Steel Industry

• Trend- Nickel futures often set the trend for the Stainless Steel industry. With less support in the Nickel market, participants in the Steel industry are concerned about potential negative impacts if demand remains lower than suppliers’ expectations. Competitive imports and weak global trends could also contribute to downward pressure on prices.

• Stainless Steel Prices- Although Stainless Steel prices have remained stable in May 2023, industry experts suggest that corrections may be imminent in the coming weeks. This has led to limited future orders, even as major Indian Stainless-steel producers like Jindal Stainless and Rimjhim Ispat announced attractive lifting discounts at the beginning of May 2023 for SS 304 HR by Rs 4,000/ton and further reduced prices by Rs 4,000/ton on 25 May’23 for SS 304/304L HR and CR grades, Ofbusiness assessed.

Current Prices

Mentioned below are the Stainless-steel prices for various grades:

• Jindal Stainless
  • 316L HR N1 at Rs. 343/kg
  • 316L CR 2B at Rs. 355/kg
  • 304 CR 2B Wider at Rs. 220/kg (retail)
  • 304 CR 2B Narrow at Rs 216/kg (retail)
  • 304 HR N1at Rs. 203/kg (basic)

• Rimjhim Ispat
  • 201/202/RT grade at Rs. 124/kg
  • RT N1 2B at Rs. 113/kg (basic)
  • RT N1 NBT grade at Rs. 115/kg (basic and FOR Delhi basis)
  • 304 CR 2B (Retail) at Rs. 206/kg
  • 304 HR N1 at Rs. 192/kg

• Others
  • SS 201 J2 imported CR at Rs. 127/kg (retail)
  • No.4 PVC Finish at Rs. 130/kg (FOR Delhi, plus GST)
  • No. 8 mirror finish at Rs. 140/kg, (FOR Delhi, plus GST)

OFB’s Insight

The global Nickel market is currently facing a significant supply glut, driven by increased production in Indonesia. Concerns about slowing demand, particularly in the electric vehicle industry, have further exacerbated the oversupply situation. These factors are expected to impact the Stainless-steel industry, with potential downward pressure on prices. While Stainless Steel prices have remained stable in May 2023 (except for a few grades), industry sources suggest that corrections may occur future.