20 January 2022 – LME nickel jumps more than 4% to over $24,000 per tonne at the start of trading. SHFE nickel and stainless steel futures have already risen by up to 8% and 6.5% respectively today. Base metals follow. Stronger demand from the automotive sector is pushing European HRC prices higher. US companies need to increase inventories by up to 300 billion US dollars to meet demand.
Market Bullish: Nickel, Stainless Steel and the Base Metals
After rising almost 6% yesterday on the LME, nickel jumped another more than 4% to start trading today, rising to over $24,000 per tonne. On the Shanghai Futures Exchange, nickel even went up by almost 8% today.
Stainless steel futures jump significantly
Strong demand and higher nickel prices have also caused some upward movement of more than 6.5% in stainless steel futures. Yesterday it was already known that Taiwanese and Japanese stainless steel producers are planning price increases for February and Chinese producers have already raised prices and there are hardly any offers from China.
Base metals are also holding firm, with copper and zinc continuing to rise.
Where does the trend in prices for metals come from?
The background to the further increase in prices, especially for nickel, is very tight availability, high energy costs and enormous demand. In addition, some mines are experiencing outages, as reported by the media.
EU: HRC prices rise due to demand for cars
As we already expected, European hot-rolled coil prices have risen due to much better demand from the automotive sector. In addition, the first HRC producers seem to be fully booked for Q1 2022. Higher energy costs are also supporting prices.
US: Inventories need to be replenished by 300 billion US dollars
The economy in the United States is humming and manufacturers can hardly keep up with the growing demand. According to Deutsche Bank, US inventories would have to be increased by almost 300 billion US dollars. This should give the US industry a good boost this year.
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.