Sufficient Inventories Ease the European Inconel Prices in February 2023
- 28-Feb-2023 4:44 PM
- Journalist: Francis Stokes
In February 2023, Inconel prices declined by more than 3.2% in the European market due to a drop in raw material Nickel costs and a stable demand outlook. According to market participants, feedstock Nickel prices have returned sideways in the short term after reaching a peak in January. The downside risk for Inconel could become more significant because the raw material price has not risen enough to signal an uptrend. Meanwhile, volume levels appear to be at least partially responsible for the current Inconel and Nickel price action. Since January 2023, the overall volume of Inconel buyers has been decreasing. This comes following a much higher loss of cash flow in 2022. The rally has not only lost momentum now but there is enough volatility in the market for Nickel prices to have no clear market direction at all.
According to our sources, in H2 of 2023, the Inconel market recovery will increase Nickel demand, resulting in increased output. However, average raw material prices, such as nickel, were anticipated to fall this year. Inconel inventories for service centers, distributors, and end users remain high in February 2023. Some service centers reported having nearly two months' worth of supplies on hand. Larger distributors have resisted booking volumes because they are unwilling to commit to making deals for material with longer lead times. As a ripple effect, Inconel buyers may still be able to make some opportunistic purchases.
Inconel trading activity remained subdued this week in Northern and Southern Europe because buyers have yet to restock volumes for the second quarter of 2023. Inconel manufacturers, on the other hand, were upbeat, citing strong order books and limited supply. While Inconel mills face high production costs and say they need to raise their prices, service centers in Northern and Southern Europe report average demand for their products. Following the post-pandemic rush, some domestic participants anticipate that the European market will return to normal Inconel consumption. The market is no longer booming; it is simply returning to the levels seen in 2018 and 2019. Thus, ChemAnalyst anticipates that Inconel prices will rise due to rising raw material costs and stable downstream demand from gas turbine components such as blades, seals, and rotors.