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Customers Are Highly Sensitive To Price Rise Of LME Nickel/Inquiries Are Increasing
As soon as the LME nickel price rose to $7.50 per pound late last week, customers' bid prices of austenitic cold-rolled (CR) stainless steel sheets rose, and the number of their inquiries are increasing. If the nickel price is kept up at the high $7.00's or rises to the level of $8.00, the atmosphere of a market is predicted to change drastically.

In the East Asian area, Korea's POSCO is said to have offered prices of austenitic CR stainless sheets at $2,600 CFR, and to have concluded a contract lowering its prices to the lower end of the $2,500 CFR range but if the nickel price continues to rise within this week, the company is seen to raise its offer prices to the level of $2,700 CFR soon.

The LME nickel price hit $9.30 per pound in February this year. After that, it continued to drop to the $6.00 range at one time, and was the level of $7.00 in August. During this time, that means it increased as much as a little over $2.00. The nickel price drop of $1.00 per pound corresponds to price down by $200 per ton for austenitic stainless sheets. Consequently, price down by $400 is to have been forced. However, prices of CR stainless sheets dropped by about $600 worldwide including in Europe and the USA from February onward, which means those prices fell by more than linked price to the nickel one. They dropped too much but seem to have decreased by more than the nickel linked portion under an economic downturn.

China's Wuhan Iron & Steel (WISCO) noticed recently its domestic prices of stainless steel sheets, and set its prices of austenitic CR stainless sheets at 18,200 CNY ($2,884, tax inclusive). They were reduced by 700 CNY ($111). The prices of austenitic CR stainless sheets in Wuxi are no changes at 18,200 CNY. Usually, in WISCO's prices, the discount by 600 CNY is said to be included, and therefore, WISCO's September prices fell virtually below the market ones. If the trend of price rise of nickel continues, WISCO is thought to revise its September prices quickly. As in case of the LME nickel price being the level of $7.00, even production of nickel pig iron which is mainly used by the Chinese mills is seen to incur a loss, not only WISCO but also other mills are believed to move toward price increase of austenitic CR stainless sheets.

As in the European and US areas as well, the nickel price hit a bottom at present, each stainless steel mill is seen to increase its prices on and after September 21. At present, prices of austenitic CR stainless sheets are $2,900 to 3,000 which far exceed the level in Asia, and those will exceed $3,000 even at a lower price.

Anyhow, if the nickel price is maintained at more than $7.50, a customer is believed to move to replenishment of inventory, and the environment is most likely to change rapidly.
last modified : Mon 03 Sep, 2012 [11:06]
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