Activities in the stainless steel market almost came to a standstill towards the end of 2015. Whilst general business activities have resumed after the traditional holiday period, the stainless steel market still seems to be in sleep mode. LME Nickel price has further weakened and fell below USD 8,500 per tonne in January. Stainless steel prices continue to be stagnant around the globe and announced price increases in the USA still have not materialize.
All eyes continue to be on China. The recent declines in the Chinese stock markets sent disturbing signals to the global markets about the actual state of the Chinese economy. A group of private Chinese stainless steel producers already reacted to weak market conditions by announcing production cuts in December 2015 and other producers may follow. The Chinese stainless steel production has not grown in 2015, and could even drop in 2016 – a situation that has never been seen before. With the Chinese New Year holidays being around the corner, very limited activity can be expected in the Chinese market within the next month which could prolong the ‘wait-and-see’ attitude in the remaining stainless steel world.
One of the few positive indicators on the horizon is the fact that NPI (nickel pig iron) prices in China have bottomed out and leading mills have to pay higher prices in January compared to December in order to get sufficient supplies, indicating that this could finally be the trough for nickel prices.