India: Stainless steel prices rise w-o-w driven by surge in LME nickel

• Domestic finished prices rise despite weak demand
  
  
• LME nickel prices surge over 9%
  
  
• Inquiries from mills decline on rising offer levels
  
  

India's stainless steel finished and imported scrap prices gained w-o-w on surging LME Nickel prices. Meanwhile, the domestic scrap prices have remained firm. However, the demand in the market has been on the weaker side and transactional activities have also been at low to moderate levels for the week.

BigMint's benchmark assessments for stainless steel (304 series) hot-rolled coil (HRC) prices stood at INR 183,000/tonne (t) ex-Mumbai, while domestic 304-grade scrap was priced at INR 121,000/t ex-works Delhi.

Additionally, BigMint has launched two new assessments for SS 430-grade scrap and SS 201 scrap originating from the nearshore (Middle East, Thailand and Indonesia).

LME nickel price trend

At the time of reporting, three-month LME nickel prices were at $18,270/t, marking a 9.5% increase from the previous week's $16,740/t. Meanwhile, nickel stocks in LME-registered warehouses rose w-o-w, reaching 131,178 t, up from 124,140 t the previous week. Nickel prices on the LME surpassed $18,000/t, marking a notable rebound after months of decline.

This increase follows the U.S. Federal Reserve's 0.5% interest rate cut and China's recent monetary stimulus supporting the property sector. Additionally, the stockpiling from the Chinese buyers before going for the National Holidays also boosted the market prices.

Despite concerns over Russian nickel exports, significant quantities remain in LME warehouses, maintaining artificially high stock levels. Speculation suggests the LME may await certain stock levels before excluding Russian nickel to avoid market disruptions. Additionally, China's recent ambitious stimulus program has positively impacted nickel prices, alongside iron ore and steel, as markets responded enthusiastically.

Domestic finished flat segment remains stable

In the finished flat segment, prices saw an increase this week. According to BigMint's assessment, 304 HRC prices ranged between INR 182,000-184,000/t, while SS316 HRC stood at INR 319,000-321,000/t ex-Mumbai.

A source stated: "The market prices have gained in the week due to the rising nickel prices on LME. Despite the rise in prices, the trade levels and demand is still on the lower side. "

A trader source commenting on the market expressed doubt whether sentiments would change in the short term. "Doubtful, as Diwali approaches, market activity is expected to decline in the next 15 days. The Chinese holiday and the Diwali festival may reduce demand for stainless steel. There are concerns about whether the recent LME surge will translate into a price increase."

Domestic finished longs' (AOD grade) indicative levels

In the finished longs' segment, 304L (100-130 mm) black round bars were priced at INR 202,000-205,000/t exw-Mumbai, while SS 304 bright bars were at INR 220,000-221,000/t exw-Mumbai. SS 316L black round bars were offered at INR 313,000-315,000/t exw-Mumbai, and SS 316L bright bars were priced at INR 335,000-336,000/t exw-Mumbai.

Indicative prices of SS 304 wire rods (5-16mm) were reported at INR 166,000-168,000/t, while SS 316-grade wire rods were priced at INR 284,000-286,000/t, both ex-works Mumbai.

A mill official said: "Demand for long products remains weak, although prices have seen a slight increase due to a small rise in raw material costs, particularly scrap. Most mills are sourcing scrap domestically, with only a few opting to book imported materials."

Additionally, FOB Nhava Sheva prices of 304 bright bars (20-100mm) were at $2,420-2,440/t, while 316 bright bars (20-100mm) were priced at $4,020-4,040/t. Wire rods (5.5-16mm) were at $2,160-2,180/t.

Imported scrap prices inch up, domestic levels firm

BigMint's benchmark assessment for imported SS 304-grade scrap was $1,440/t CFR Mundra, with suppliers quoting $1,450-$1,480/t. Buyers' bids were slightly lower, ranging between $1,410 and $1,430/t. Meanwhile, 316-grade scrap was priced at $2,635/t CFR Mundra, with suppliers offering it at $2,650-$2,670/t. Buyers' bids were at approximately $2,600-$2,620/t.

As per BigMint's assessment, SS 430 scrap is priced at $640/t and SS 201 is priced at $750/t, both CFR Mundra.

A market source mentioned, " Currently, buying activities for imported materials have declined due to rising offer levels. Most mills sourcing scrap have paused their procurement of imported scrap. However, a few mills have successfully secured some material at workable prices. "

This week, domestic 304 scrap prices remained firm at INR 121,000/t ex-Delhi NCR, on cash payment terms. Sources indicated that major mills are purchasing 304 scrap at around INR 124,000-126,000/t delivered (DAP), with a credit period of 30-45 days.

The inquiries for imported scrap have increased particularly from mill side buyers driven by the slight drop in offered prices. A trader said: "Mills are majorly focusing on the domestic material and the inquiries for imported have reduced."

China market

In China, domestic stainless steel prices marginally up w-o-w. Prices of 304-grade CRC reached RMB 14,300/t ($2,005/t) ex-works, while FOB prices of 304-grade CRC were at $2,055/t.

China's domestic stainless steel market has faced challenges since early September, with low sentiment and unmet expectations for peak consumption. However, demand is rising in South China, particularly in the automotive and new energy sectors. Wuxi's stainless steel inventory decreased by 1.38% to about 611,000 t, but market uncertainties continue to prompt cautious trading.