This week, the LME nickel price reached USD 7.60 per pound which recorded the lowest price same as the level on December 15th 2009 when the Lehman's shock happened in that year. It is uncertain whether this affects the market but inquiries of cold rolled Ni system stainless steel sheets from distributors of Taiwan and South China are increasing.
Instead of spot purchase till now, such inquiries are for 3 months in bulk, and customers are embarking on replenishment of inventories judging that the present price is a bottom. Usually, from November to December, the nickel price becomes the lowest in that year, and dealing of cold stainless sheets becomes sluggish in the end of the year. In this year as well, the nickel price hit the lowest, and in the Asian market, prices of Ni system cold stainless sheets are the level of USD 2,850 to USD 2,900 CNF dipping below USD 3,000 at present.
The average LME nickel prices were USD 9.30 per pound in September 2011, USD 8.60 in October and USD 8.10 in November. For these 3 months, it dropped by 1.2 points. One point down of nickel price is equivalent to USD 200 down of products. With this, corresponding to drop of the nickel price, prices of products decreased by USD 240 or so to USD 2,900 CNF for these 3 months from USD 3,150 CNF in September. The present offer prices are USD 2,850 CNF by Korea's POSCO, Taiwan's YUSCO and so on, and the level of USD 2,900 CNF by the Japanese mills.
Attention is attracted to see whether the price level becomes a real bottom in the export market. As each customer has been devoted to spot purchase till now, such customer seems to have little inventories. For that reason, if the present one is a bottom price, purchasing is expected to spread rapidly.
POSCO of Korea maintained its domestic price of cold stainless sheets for December shipment on the same level. Its leveling off of prices has continued for 3 months in a row. The company's list price is KRW 3,780,000 per tonne. However, this list price is not carried out. It is reported that the discount range had been KRW 100,000 before but at present, it has expanded to KRW 400,000 to KRW 500,000. Therefore, its actual price seems to be the level of KRW 3,200,000 or so.
Taiyuan Iron and Steel also maintained its price for December shipment at the current level. The company maintained its prices on the same level during these 4 months except November's decrease by CNY 2,000. The current price is CNY 22,100 but it seems too much to be decreased considering the nickel price level. The market price of Wuxi is CNY 20,000 and from this level as well, it the range of price decrease in November seems too much. YUSCO of Taiwan is expected to announce its December prices in a couple of days. It is foreseen that YUSCO will decrease its price by TWD 100 or so converted into dollar because of the price drop of nickel by 0.5 points in November from that in October.
Each customer is struggling against repayment to a bank in the end of the year. With this, among the distributors, some are facing a financial difficulty while some are moving on to replenishment of inventories seeing the future trend.
Meantime, almost any change in the Cr-system cold stainless sheets cannot be seen for the time being. In case of SUS430, its market price is the level of USD 1,500 CNF while the Japanese mills' offer prices are hovering at the range of USD 2,000.
(Sourced from TEX Report Limited)
