India: Stainless steel prices decline w-o-w amid drop in LME nickel

Prices of stainless steel, including 304 series domestic finished flats, imported and domestic scrap, declined w-o-w in India amid a reduction in LME nickel prices. However, 316 series grade finished flat prices inched up w-o-w on price hikes by major Indian mills.

According to BigMint's benchmark assessments, stainless steel (304 series) hot-rolled coil (HRC) prices were at INR 182,000/tonne (t) ex-Mumbai, while domestic 304-grade scrap was priced at INR 121,000/t exw-Delhi.

LME nickel prices continue to drop

At the time of reporting, three-month London Metal Exchange (LME) nickel prices were at $15,990/t, marking a 1.4% w-o-w decrease from the previous week's $16,215/t. Meanwhile, nickel stocks in LME-registered warehouses rose w-o-w to 122,214 t, up from 121,230 t in the previous week.

LME nickel prices adjusted in line with the increase in inventory levels, as anticipated by market participants. Inventories rose by around 1% w-o-w, corresponding with the drop in LME nickel prices.

Additionally, sources stated, "European stainless scrap prices have declined significantly by over $100/t. This decrease is due to several factors. The consumption of nickel pig iron (NPI) imports has reduced the demand for stainless scrap, while stainless scrap producers are operating at only 70% capacity, reflecting weak market demand. The influx of cheaper imports from China and Vietnam has further pressured European prices, contributing to the overall decline."

Domestic finished flat prices fluctuate

Global mills currently have ample supplies of flat products, making imported options, particularly from Vietnam and Indonesia, more competitive. For instance, the cost of Vietnamese 304 cold-rolled coil (CRC) to India is INR 186-187/kilogramme (kg), while 316 CRC is priced at INR 323-324/kg. The abundant availability of CRCs is due to substantial imports from Vietnamese mills, which has influenced flat market dynamics.

In the finished flat segment, prices of 304 grade saw a marginal fall this week. As per BigMint's assessment, 304 HRC prices stood at INR 182,000-183,000/t, while 304 CRC prices stood at INR 191,000-192,000/t ex-Mumbai, a fall of INR 1,000/t w-o-w. These price drops followed the decline in LME nickel prices.

While 316 grade HRC prices stood at INR 317,000/t ex-Mumbai, a rise of INR 4,000/t w-o-w, 316 CRC stood at INR 330,000/t ex-Mumbai, a rise of INR 3,000/t w-o-w, mainly due to an increase in molybdenum prices, a key alloying element in this grade. The higher cost of molybdenum has prompted major coil manufacturers in India to raise their prices accordingly.

Domestic finished longs (AOD grade) indicative levels

In the finished longs segment, 304L (130-160 mm) black round bars were priced at INR 205,000-206,000/t exw-Mumbai, while SS 304 bright bars were at INR 223,000-225,000/t exw-Mumbai. SS 316L black round bars were being offered at INR 314,000-315,000/t exw-Mumbai, and SS 316L bright bars were priced at INR 345,000-346,000/t exw-Mumbai.

A mill source stated, "Demand for finished long products of stainless steel is beginning to pick up, as European buyers are becoming active with their quarterly purchases."

Scrap market insights

This week, in the domestic scrap market, prices of 304 scrap stood stable at INR 121,000/t ex-Delhi-NCR on cash payment terms. Sources indicated that major mills are purchasing 304 scrap at approximately INR 124,000-125,000/t delivered (DAP), with a credit period of 30 days.

However, imported scrap prices declined by nearly up to 3% w-o-w. Additionally, there were minor bid-offer disparities in the market.

BigMint's benchmark assessment for imported 304 grade stainless steel scrap stood at $1,410/t CFR Mundra. Suppliers are quoting 304 grade scrap at $1,440-$1,460/t, while buyers' bids range lower at $1,380-$1,400/t. Prices of 316 grade scrap were at $2,600/t CFR Mundra, with some suppliers offering it at $2,650-$2,660/t.

China market overview

During the week, China's domestic stainless steel prices stood largely stable w-o-w. Prices of 304 grade CRC touched RMB 14,400/t ($2,005/t) exw. Meanwhile, prices of 304 grade CRC stood at $2,101/t FOB.

Raw materials scenario

Ferro molybdenum: Indian ferro molybdenum prices increased by INR 12,500/t ($148/t) w-o-w compared to the previous assessment on 4 September, driven by increased demand in the global market, particularly from China.

BigMint's assessment indicates that as of 11 September, ferro molybdenum prices in India stood at INR 2,560,000/t ($30,481/t) exw-Nagpur, calculated on a 60% pro-rata basis.

Ferro chrome: Indian ferro chrome prices (HC, FeCr60%) stood at INR 114,500/t exw-Jajpur, up by INR 1,500/t w-o-w.

Outlook

Stainless steel prices are anticipated to experience a slight downward correction due to falling LME nickel prices. Domestic trade activities are expected to remain moderate. Global nickel prices on the LME may undergo short-term fluctuations in the near term.