Germany: Automotive sector picks up speed
Germany: Automotive sector picks up speed

11 April 2023 – Sentiment in the auto industry in Germany improved significantly in March. Indonesia is desperately trying to get a foothold in the US industry, but is struggling not only with too much Chinese influence and a lack of environmental standards. Demand for stainless steel scrap in Asia remains stronger than for nickel pig iron. EU stainless steel producers are also likely to feel the price pressure on scrap.

Germany: Automotive sector picks up speed

According to Deutsche Bank, sentiment in the auto industry in Germany improved significantly in March, with the ifo barometer rising from 7.6 to 23.7 points. Suppliers were more optimistic at 34.7 points than manufacturers at 19.4 points. The former recorded their first increase in orders in eleven months, while the latter benefited from a persistently high order backlog.

Tailwind from China

Additional tailwind could come from China: Although demand for cars there has been sluggish so far in 2023, prompting some manufacturers to cut prices, the bottom is likely to be reached shortly. With DAX carmakers estimated to generate a third of their profits in China, the sector could develop robustly.

Nickel: Indonesia’s Investment Minister is set to visit the US

Indonesia’s Investment Minister is set to visit the US to address concerns regarding alleged nickel discrimination. The minister seeks to ensure fair treatment for Indonesia’s nickel industry and defend the country’s environmentally friendly mining practices. However, the rapid expansion of nickel mining in Indonesia has raised serious environmental concerns.

Growing environmental problems

According to recent articles, the nation’s nickel mines have led to deforestation, destruction of nature, and loss of biodiversity in Indonesia. These issues highlight the dark side of the growing demand for nickel in the electric vehicle and battery sectors.

Too much Chinese influence?

Furthermore, in addition to the problematic environmental standards in raw material mining, there are likely to be major reservations on the us side about Indonesian nickel due to the strong Chinese influence in the Indonesian nickel industry. The US neighbor Canada could therefore be the closer and also cleaner partner for the US government with regard to nickel. Especially because Indonesia has not yet taken a clear position on the Russian crisis.

Chrome, NPI, stainless steel scrap

In March, Chinese high-carbon ferrochrome output saw a notable increase, driven by factors such as the end of the Lunar New Year holiday and relaxed energy consumption restrictions. Additionally, high chrome ore prices and elevated bid prices for ferrochrome at major stainless steel mills contribute to the production surge. As the steel industry continues to recover, demand for high-carbon ferrochrome, a crucial material in stainless steel production, is expected to grow, supporting higher output levels.

However, the pent-up demand from the Chinese industry should soon compensate for the increased ferrochrome production, while the supply of chrome ores is still tight and is expected to remain so.

NPI and stainless steel scrap prices up

Nickel Pig Iron prices rose again today in China by about 1%. Nevertheless, analysts believe that it is currently more attractive for Asian producers to use stainless steel scrap instead of NPI in EAF production.

Stainless steel scrap prices with major influence

This is likely to further influence scrap availability and also encourage European producers to further adjust stainless steel prices upwards. Indian stainless steel scrap prices also showed a stable sideways movement recently. Chinese spot prices for 304 stainless steel scrap also increased by about 1% today.

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