31 May 2022 – Depending on the region, steel prices have been holding steady for two to four weeks. Market participants concerned about quality. India to shut down up to 50% of its coal-fired power plants. Strike broke out at Canadian nickel mine. And LME and SHFE nickel stocks at historic lows.
HRC prices stable for several weeks
Since European HRC prices experienced a correction in mid-May 2022, they have moved almost steadily sideways over the past two weeks. The same can be observed for Chinese and North American HRC prices, which had already corrected somewhat downwards at the end of April, beginning of May 2022.
Flat steel prices remain at a significantly higher level
This means that flat steel prices are likely to have stabilised and remain above or at the same level as prices in December 2021, according to other media such as Kallanish, S&P Global and Argus.
There will be no going back to pre-pandemic levels
The head of Metinvest Western Europe Roberto Re recently said: “However, there will be no going back to pre-pandemic levels. International trading limitations are resulting in a structural change that is seeing the regionalisation of prices. In the next 3-4 years, Europe may see quite high prices driven by the future post-war reconstruction of Ukraine.”
Italy needs to restock
Italy in particular, but also other parts of the EU, have started to replenish depleting stocks. Demand for plates and HRC is picking up there. This should further support prices. According to market participants, the biggest challenge for buyers is currently often the lack of quality of the low-cost suppliers.
India wants to shut down 50% of its coal-fired power plants
India cannot escape the energy headlines. Now the government is planning to shut down nearly 50% of India’s 173 coal-fired power plants. This is to support the shift to more green energy over the next four years.
Can India succeed?
For months, India has been suffering from an acute energy crisis that not only affects the civilian population, but has already had an impact on aluminium and steel production in the country. Recently, the Indian government waived export taxes of 15% on important flat steel products.
Cost pressure for Indian steel producers continues to grow
With the planned shutdown of more than 80 coal-fired power plants, the existing problems of Indian manufacturers are likely to grow even more. Green energy tends to be more expensive than coal-fired power and India currently has a lot of catching up to do in this regard. This, in addition to the increased raw material costs and the 15% export tax on steel and stainless steel, will also have an impact on the production costs for Indian steel and aluminium products.
Strike in Canadian nickel-copper mine
A strike has broken out at the Canadian Raglan nickel-copper mine, which belongs to the Glencore Group. This has led to a complete stoppage of work at the mine. The mine produces 95,000 tonnes of nickel, copper and cobalt matte annually. It is currently unknown how long the strike could last. The background is disagreement between the workers and the company over working conditions, pay and the use of subcontractors.
SHFE nickel stocks fall to new low
Nickel stocks on the Asian SHFE fell by almost 10% last week and are now well below 3,000 tonnes. A new historic low for nickel was also reached on the LME. The stocks on the LME currently amount to less than 72,000 tonnes.
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