India: Stainless steel prices rise w-o-w on LME nickel gains, major coil maker's price hike

India's stainless steel finished flat prices have experienced consistent w-o-w gains for the fourth consecutive time, while imported scrap prices have also shown positive trends due to rising LME nickel levels. Domestic scrap prices remained stable w-o-w with no major fluctuations.

Additionally, India's leading stainless steel coil manufacturer announced a price hike effective 23 August 2024, driven by rising LME nickel prices. This represents the third consecutive price increase in August.

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

At the time of reporting, the three-month LME nickel prices were at $16,980/t, marking a 1% increase from the previous week's $16,900/t. Meanwhile, nickel stocks in LME-registered warehouses rose w-o-w, reaching 116,616 t, up from 114,066 t the previous week.

What has kept LME nickel prices positive?

LME nickel prices have remained positive due to several factors. The increased likelihood of a Federal Reserve interest rate cut in September, along with China's announcement of expanded subsidies for its second home appliance trade-in program, has significantly boosted China's stainless steel market and driven up nickel prices.

Despite weak demand and rising LME nickel inventories, which could potentially exert downward pressure, tight nickel ore supply in the Philippines and stagnant progress from Indonesia's RKAB have kept downstream ore inventories low. This has supported sustained demand and contributed to price stability.

Domestic finished flat prices firm

In the finished flat segment, prices saw a marginal gain this week. As per BigMint's assessment, 304 HRC prices stood at INR 182,000-184,000/t, while prices of the SS316 HRC stood at INR 312,000-314,000/t ex-Mumbai.

A source said, "This week, market prices of finished flat products have increased, primarily due to consecutive price hikes by leading stainless steel flat product manufacturers and firm prices on LME nickel. Despite the price increases, demand for finished products remains low to moderate. Transactional activity has been minimal."

A recent deal for 50 t of SS316 CRC was heard concluded at INR 327,000/t, ex-Mumbai. Another transaction for around 100 t of SS304 CRC was heard at INR 193,000/t, ex-Mumbai.

A market participant mentioned, "The increase in these prices appears to be temporary and may not last long. LME nickel levels are anticipated to decline in the coming weeks due to rising inventories, which will likely put downward pressure on prices. Additionally, India's leading coil manufacturer is expected to lower prices, further contributing to the decline. "

Domestic finished longs' (AOD grade) indicative levels

In the finished longs segment, 304L black round bars were priced at INR 205,000-207,000/t exw-Mumbai, while SS 304 bright bars were at INR 220,000-223,000/t exw-Mumbai. SS 316L black round bars were offered at INR 310,000-312,000/t exw-Mumbai, and SS 316L bright bars were priced at INR 325,000-327,000/t exw-Mumbai.

A mill source informed BigMint, "At present, demand for finished long products of stainless steel is weak. Moreover, many mills have paused the purchase of imported scrap because of elevated offer prices."

Scrap market insights

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

Imported scrap prices rose by up to $30/t w-o-w due to increasing LME price trends. However, higher offer levels have deterred mills from purchasing imported material. Additionally, there was a significant bid-offer disparity of $50-$60/t in the market.

BigMint's benchmark assessment for imported SS 304-grade scrap price stood at $1,450/t CFR Mundra, up by $30/t w-o-w. Meanwhile, suppliers are quoting SS 304 scrap at $1,480-$1,500/t, while buyers' bids range was slightly lower at $1,400-$1,420/t. The 316-grade scrap was priced at $2,650/t CFR Mundra, with some suppliers offering it at $2,660-$2,680/t. Buyers' bids are currently at around $2,600-$2,630/t.

A supplier from Thailand said, "The current offer is $1,500/t, but we can reduce it to $1,480/t at most. There is a bid-offer gap in the market, with buyers requesting significantly lower prices. "

Additionally, a recent deal for 100 t SS 430 scrap originating from the US was heard at $690/t, CFR Mundra. Meanwhile, offers for SS Zurik scrap originating from the US ranged from $1,320-$1,390/t levels for SS content of 90-95%.

In a recent development, a coalition of Indian port workers' unions has called for a strike starting 28 August, demanding prompt resolution of pay revisions and pension benefits, as per a notice signed by its members. The strike will affect ports such as Vizag and Chennai from 28 August, with Nhava Sheva joining from 9 September. This action could exacerbate the existing congestion at Asian and European ports, potentially causing further delays in shipments and impacting global trade and commerce. While this disruption may temporarily affect port activities, it is expected that the issue will be resolved soon.

India's stainless steel scrap arrival in July 2024 saw a notable increase of 16%, reaching 108,465 t compared to 93,408 t the previous month. However, y-o-y, imports decreased by 8% from 118,519 t in July 2023. Among suppliers, the US remained the largest source, followed by Thailand and Vietnam.

China market overview

During the week, China's domestic stainless steel prices stood largely stable w-o-w. Prices of the 304 grade CRC reached RMB 14,300/t ($2,005/t) ex-works. Meanwhile, prices of 304 grade CRC stood at $2,106/t FOB.

Raw materials scenario

Ferro molybdenum: The Indian ferro molybdenum market saw a marginal price increase, with a w-o-w rise of INR 10,000/t ($119/t) from the previous assessment on 21 August. This price uptick was driven by a rise in inquiries in both domestic and export markets.

As per BigMint's assessment on 28 August, the price of ferro molybdenum in India stood at INR 2,497,000/t ($29,741/t) on a 60% pro rata basis, ex-works Nagpur.

Ferro chrome: Indian ferro chrome prices (HC, FeCr60%) stood at INR 103,100/t exw-Jajpur, up by INR 3,600/t w-o-w.

Outlook

Stainless steel prices are expected to remain firm in the near term due to rising nickel prices. However, domestic trade activities are likely to remain sluggish. Global nickel prices on the LME may experience short-term fluctuations in the near future.