12 October 2022 – In August and September 2022 there was a significant shortage of Chinese stainless steel. This trend could now continue for October. And a British court approves lawsuits over cancelled nickel deals against the London Metal Exchange.
Stainless steel in short supply?
In August and September, Asian market participants had already reported a significant shortage in the supply of certain stainless steel grades of Chinese origin. The reports even went so far as to speak of completely empty warehouses.
Strong demand from downstream industry
Now, Chinese analysts also confirm the rumors that in August and September 2022, supply could not meet demand. In particular, strong demand from the downstream industry caused manufacturers’ inventories to fall rapidly.
Chinese Blue Skies Policy
Whether the prevailing shortage can be quickly addressed is currently questionable. The Blue Skies policy and other measures taken by the Chinese government in the run-up to the 20th Party Congress of the Communist Party have already resulted in Hebei Province, which accounts for one fifth of steel production in China, having to cut crude steel output by up to 50%.
Spot prices for steel and stainless steel in Asia rise
Spot prices for Chinese stainless steel have risen after the holidays there, according to market sources. And rising steel prices are also reported in India, well above pre-pandemic levels.
Cancellation of nickel trades: lawsuits against LME admissible
A British court has granted U.S. hedge fund Elliot Associates and Jane Street Global Trading permission to sue the London Metal Exchange (LME) over the cancellation of nickel trades in March, according to a court document.
Companies demand compensation
Elliott and Jane Street are seeking damages of $456.4 million and $15.34 million, respectively, after the nickel price reached a record $100,000 per ton on March 8, prompting the LME to suspend nickel trading and cancel the trades.
The nickel trading incident is the biggest crisis, some would say the biggest scandal, the world’s oldest metals forum has seen in decades.
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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.
