Stainless steel and aluminium - where is the trend heading?
Stainless steel and aluminium – where is the trend heading?

19 October 2022 – What are the stainless steel and aluminium markets doing at the moment? Where is the journey going? Rising prices, raw material costs, sanctions, increasing demand. And is Russian aluminium, like copper, becoming a slow seller? In addition, positive news from the United States for the manufacturing industry and especially for the carmakers there.

Stainless steel and aluminium at a glance

Stainless steel: Current demand trend continues upwards

The demand for stainless steel has increased, as we have already pointed out several times in recent days. But prices are also rising. Not only in Europe, but also in Asia. This is not only due to the high demand, but also to the rising raw material costs.

LME nickel prices well above 2021 level

The nickel prices on the LME, for example, are already above the level of the beginning of 2022 and well above the average of 2021, if one disregards the dislocation from the spring of 2022.

Demand for nickel remains high

The demand for nickel products remains unbroken, which can also be seen in the figures. The SHFE nickel price rose by more than 2.5% today, Chinese nickel spot prices by more than 3% in some cases.

Prices continue to rise

This has a direct impact on stainless steel prices. Not only in China, where there has been an increase of almost 2% for certain grades, but also for other markets, such as Turkey, where market sources have also announced price increases.

Where is the aluminium journey heading?

Aluminium has recently suffered a setback after the LME price made a significant jump of more than 7%. According to media reports, the commodity group Glencore has delivered large quantities of aluminium from Russia to an LME warehouse in South Korea.

Higher inventories or more of a slow seller?

Higher inventories on the LME often mean greater availability for the market, which causes prices to fall. On the other hand, demand for raw materials of Russian origin has fallen dramatically, as can be seen from the large Russian copper stocks in the warehouses of the commodity exchange, which are considered to be slow-movers.

Buyers no longer want Russian aluminium

Russian commodities, especially aluminium, are currently being hotly debated on the LME. They are trying to decide whether Russian aluminium should be banned from the trading centre. For the year 2023, the LME is confronted with the challenge that more and more customers are rejecting raw materials from Russia and no longer want to use them. In addition, there are sometimes high punitive tariffs and uncertainty about possible new sanctions from the West.

Aluminium availability still scarce

If the vituperation against Russia continues, and it looks like it will at the moment, the quantities now delivered to South Korea will probably also become slow sellers. And if the aluminium shortage continues, the price will theoretically rise, but it will not be possible to sell these quantities from Russia.

Further sanctions against intermediate products?

In addition, aluminium consumers now have to deal with the possibility that products from third countries that were manufactured with intermediate products from Russia could also fall under Western sanctions. As has just been the case with steel, for example.

US market data surprises on the positive side

In the US, the recent rise in the manufacturing purchasing managers’ index had already sent positive growth signals for September. The “hard facts” published yesterday were nevertheless surprising. With a production increase of 0.4 per cent over the previous month, the US manufacturing industry showed remarkable resilience.

Automakers can expand production significantly

US carmakers and their suppliers in particular were able to noticeably expand production as supply chains normalised. Their output level is now slightly above the pre-pandemic average.

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