August 19, 2021 – Measures taken by the Chinese government are causing stainless steel exports to fall. This reduces available stainless steel imports to Europe, which is dependent on imports due to robust demand. Chinese NPI stable, nickel ore prices rise. Strong US steel demand significantly increases shipments via sea routes. And copper is once again behaving like a diva.
Deutsche Bank: Improved situation for European stainless steel mills
European stainless steel imports are below peak levels despite robust demand. Lower output in the Chinese steel industry has contributed to this, as have rising freight costs and EU import duties.
Iron ore prices down by almost 30%
China last week imposed yet more restrictions on domestic steel production next winter to improve air quality. China’s curbed production has already led to a drop in iron ore prices of nearly 30% since mid-July.
Possible Chinese steel export tax reduces EU imports
In addition, the introduction of a Chinese export tax of 15 to 20 percent on some steel grades is under discussion in order to meet domestic demand. An increase in EU imports is therefore not expected in the coming months. European stainless steel mills can benefit from this in view of increased margins.
Chinese nickel pig iron stable, nickel ore prices rise
Chinese nickel pig iron (NPI) prices remained stable this week due to higher raw material costs at smelters. The price of grade 8-12% NPI in east China’s Jiangsu province was 1,400 yuan/mtu ($216/mtu) on August 17, including delivery and 13% VAT, the same level as the previous week.
Philippine 1.5% nickel ore has risen again this week and has currently reached an average CIF price of about $87 per wmt. This is up about 3.6% from the previous week.
Strong U.S. steel demand boosts shipments via seaways
Steel imports from Europe continue to be the driving force behind the increase in general cargo traffic on the 3,700-kilometer Great Lakes-St. Lawrence Seaway System, figures released Wednesday show.
U.S. CAN: Pent-up demand for industrial goods and construction materials.
General cargo shipments totaled 1.6 million metric tons in July 2021 – up 52% from the same period in 2020. This sharp increase continues to be driven by steel imports from Europe and other countries going to Canadian and U.S. cities across the region to support pent-up demand for industrial goods and construction activity.
St. Lawrence Seaway up 5% from 2020 levels
Thanks to strong shipments of cement, steel and steel-making materials, total cargo volumes on the St. Lawrence reached 16.7 million tons by the end of July, 5 percent above 2020 levels.
The Copper Diva
Copper is once again behaving like the proverbial opera diva. Although all signs indicate that the price of a ton of copper should be closer to $ 11,000, it is currently hovering around $ 9,400. And this even though three of the world’s most important copper mines are currently either not producing at all or only to a limited extent – in South America it’s the miners’ strikes, in Canada forest fires.
What factors are putting pressure on copper prices?
Lower demand from China, increased inventories on commodity exchanges and little summer activity on the part of investors seem to be keeping copper prices “low.” Still, Goldman Sachs apparently remains convinced that the copper market has a bullish outlook and could face shortages for the foreseeable future.
It remains to be seen how investors and analysts will proceed with airs and graces on copper, the diva metal, after the summer break.
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