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Rising ferrochrome prices are pulling up domestic stainless steel producers’ August 2021 alloy surcharges significantly in the EU. By up to 10%. Nickel ore prices close to all-time high. Demand for 300 series stainless steel in 2021 up more than 35% year-on-year. Rhine reopened to shipping, but logistics problems remain.

Stainless Espresso: Rising ferrochrome prices pull up EU alloy surcharges significantly
Stainless Espresso: Rising ferrochrome prices pull up EU alloy surcharges significantly

Ferrochrome prices continue to pull up EU alloy surcharges

Ferrochrome prices have risen again and again in recent months. This is also clearly reflected in the alloy surcharges of European stainless steel producers. The surcharges for 316L are increasing here by between 7.5% and 10%.

Ferrochrome spot prices up again

In China, spot prices for ferrochrome are around $1,725 per ton. On the part of the Chinese Tsingshan Group, ferrochrome tender prices of about $1,655 per ton are reported.

Spot prices for Chinese 316L stainless steel have also increased by almost $100 per ton on Tuesday, July 27, 2021.

Chinese ferrochrome supply distruptions

The ferrochrome price increase is due to supply disruptions, production cuts, and energy curtailments in China’s Inner Mongolia region, which have been ongoing for months and have intensified since July. Inner Mongolia is one of the most important producers of ferrochrome.

Source: shfe.com.cn, dce.com.cn, lme.com

Nickel ore prices approach all-time high

Since the end of April, prices for 1.5% nickel ore have been rising rapidly again and are currently approaching their all-time high of March 2021 again. Currently, nickel ore prices stand at an average of $81.5 per ton. Bad weather and increased Covid-19 infections in Asia have driven prices.

High demand for stainless steel supports nickel prices

Months of sustained strong demand for stainless steel products, combined with production outages at key nickel producers in Russia, Canada and New Caledonia, have sent nickel prices sharply higher. Added to this is rising demand for battery raw materials for electric vehicles.

300 stainless steel series with more than 35% higher demand than a year earlier

The nickel-intensive 300 series stainless steel alone, which has 8% to 9% nickel per ton, has seen demand increase by more than 35% in 2021 alone.

Nickel is in short supply in 2021

In the coming months, therefore, analysts continue to see nickel prices around $20,500 per ton as realistic. And have revised their expectations that there could be an oversupply of nickel in 2021 and now expect a shortage of at least 83,000 tons of nickel in 2021.

Source: indiatimes.com

Rhine open again for shipping, but logistics problems remain

According to an assessment by ICIS, the Rhine is once again fully navigable for shipping traffic, but disruptions in the logistics chain are likely to have an impact for months to come.

The severe storms that flooded and badly devastated parts of Germany, Belgium and the Netherlands also severely affected Deutsche Bahn’s rail network, among others.

Delivery delays due to force majeure

Although ICIS bases its analysis specifically on the petrochemical market, the situation is likely to affect local steel producers and distributors alike. In the wake of the flood, major German steel companies, among others, were forced to announce delivery delays due to force majeure.

Overall, this is unlikely to bring any relief to the overall situation on the European steel market and the shortage of steel and stainless steel which has prevailed for months.

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