11 September 2023 – As raw nickel supplies remain tight and producers of nickel sulphate nearly sold out in August, analysts are positive on the price trend of the stainless steel and battery raw material. Out of fear of shortages, NPI producers are already stockpiling raw materials. And have EU stainless steel producers forgotten how to act economically due to too many market protection measures?
Raw nickel still in short supply, producers almost sold out in August
There are further positive signs of recovery in the nickel market as supply tightens and demand increases. Recent corruption investigations in Indonesia have restricted exports of raw nickel, leading to supply shortages for Chinese nickel pig iron (NPI) producers. This supply shortage has strengthened prices for NPI and nickel sulphate despite slowing demand for stainless steel.
Nickel sulphate producers almost sold out in August
Asian nickel sulphate prices had picked up recently. As producers almost sold out in August, spot supply is shrinking, while demand for precursors, however, continues. Tight supply and optimistic sentiment among producers are driving prices higher and approaching historical price levels.
Although demand for inputs is currently steady rather than surging, NPI producers are stocking up on sulphate to hedge against shortages of raw nickel. In view of rising NPI profits, producers are accepting higher sulphate costs.
Problems in the supply of raw nickel
Problems in the supply of raw nickel support prices for all nickel products. Indonesian ore quotas and shipping delays have reduced supply, while at the same time overall production costs are rising. This tightening of raw material supply will further increase nickel sulphate prices.
NPI stocks remain low
NPI prices held steady last week as Indonesian export problems persist. With low inventories of just 260,500 tonnes left in August, NPI spot supply remains tight and high crude nickel costs limit downside potential.
Asian analysts have been optimistic about nickel markets in September due to continued raw material constraints.
EU stainless steel producers fail to tackle home-made problems
The desperate attempt of the EU stainless steel producers to save their own skins with two more than questionable stainless steel anti-circumvention procedures once again shows the predicament of the EU mills with regard to the supply of raw materials.
However, since these are home-made problems of EU mills, they do not need to be protected by even more regulations and excessive bureaucracy.
Fewer trade wars, more economic action
Instead of fighting trade wars with more and more market protection measures, the European Union would do better to start thinking about a global trade agreement of liberal democracies. Time for a change of course, because the European steel producers seem to have forgotten how to act economically and diplomatically for some time now.
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