For the Quarter Ending December 2022
North America
In the fourth quarter of 2022, the AL6XN price showcased a declining trend in the US market with mixed LME nickel prices amid recessionary fears that undermined market sentiment. Many market participants believed in mid-Q4 that a potential strike would prevent steelmakers from cutting production further. However, the US administration signed a joint resolution requiring railroad companies and their unions to raise worker wages. Thus, this quarter witnessed higher inventories and limited demand. Mills had already attempted to keep pilled-up stocks under control, despite an expected rebound in finished steel and scrap markets in the first quarter of 2023. Additionally, nickel producers had limited product availability, which prompted mills to rush for nickel supplies. Even consumers who had been absent from the market returned with aggressive nickel purchasing prices. With the Thanksgiving holiday in the United States in mid-December, AL6XN demand fell and then lagged for the remainder of the year. As a ripple effect, the Al6XN sheet (3 mm) prices for Ex Houston and FOB Texas settled at USD 23500/MT and USD 23640/MT.
Asia Pacific
AL6XN prices in the Chinese market edged downward in the fourth quarter of 2022 due to a mixed demand outlook and fluctuating raw material costs. Compared with the past quarter, production activity surged in November against the traditional trend, boosting AL6XN demand. In November, the market began to enter the off-season, and the market's potential adverse effects were also emerging, including concern about excess inventories due to higher stainless-steel output. December was the center of the off-season, and this year's terminal demand forced the production to shrink significantly. However, lower prices, limited energy supplies, and weak demand due to adverse domestic conditions decreased domestic AL6XN production. In the fourth quarter, many steel mills announced production reductions, along with the gradual recovery of logistics and transportation. Some businesses prepared goods before the upcoming inquiries in 2023, which boosted demand to a certain extent in December. As a ripple effect, the AL6XN plate prices for Ex Shanghai and FOB Shanghai settled at USD 18400/MT and USD 18440/MT, respectively.
Europe
In the German market, the AL6XN plate prices showcased a downward trend in the fourth quarter of 2022 amidst geopolitical and energy risks, particularly in Europe, persisting in threatening the recessionary backdrop. Amid the disruption to supply chains at the start of Q2 2022 and the accompanying price jump, distributors built up stocks as much as possible to secure volumes and lock in prices before they climbed any further. However, AL6XN distributors started restocking in mid-November, but prices remained flat amid persistently slow demand. The restocking had not involved large tonnages, and the increased demand from distributors had not affected prices. As per market players, higher inventories and a poor demand outlook weighed on the market, so most European stainless mills initiated some production cuts. Thus, at the end of Q4 2022, the discussions of Al6XN Sheet (3 mm) prices for Ex Werdohl (Germany) and FOB Hamburg (Germany) settled at USD 24360/MT and USD 24850/MT, respectively.
For The Quarter Ending September 2022
North America
In the third quarter of 2022, the US AL6XN prices stagnated due to the persistent oversupply in the market amidst a lack of more permanent production cuts aimed at reducing volumes. As per market players, AL6XN prices have fallen as service centers have held off on purchasing due to weak consumer demand, which has been hampered by labor and part shortages. Fears that the United States is already in or on the verge of a recession have also reduced purchases. This includes some service centers, typically steel buyers because falling flat-rolled prices have devalued their existing inventory. Additionally, integrated steelmaker US Steel has idled its No. 8 blast furnace at its Gary Works steel mill in Indiana. Slovakia-based US Steel Kosice idled blast furnace two at its Slovakian site on 4 September for a 60-day stoppage and will continue to adjust its maintenance schedules in line with customer demand. The outages, mainly for maintenance, will run from September through November, according to current plans by US-based steelmakers and market participants. As a ripple effect, the Al6XN sheet (3 mm) prices for Ex Texas (USA) settled at USD 27200/MT in September.
Asia Pacific
AL6XN prices fell in the Asia Pacific during the third quarter of 2022 due to fluctuating raw material costs amidst a lack of pressure on operating capacity and lower input cost prices. Despite low demand and limited transactions in the domestic market, steelmakers have not reduced capacity utilization. Lackluster demand outlook, a build-up of inventories, and a decrease in iron ore prices, along with the looming threat of interruptions in China brought on by COVID and the continuous harm to exports, are all dampening sentiment. According to steel manufacturers, steel prices are falling in most domestic markets because traders are forced to sell their stockpiles. According to market participants, raw material prices, such as coking coal and iron ore, have also fallen. Despite volatile LME nickel prices, finished stainless steel prices in India remained stable during the third quarter due to stagnant demand from the railways, auto, and rice mill segments. Mills attributes the price decrease to weak domestic and export inquiries and slow trade buying. Thus, the prices of Al6XN plate (3 mm) for Ex Mumbai (India) settled at INR 1448000/MT.
Europe
In the European market, the AL6XN prices plunged during the third quarter of 2022 as buyers were already restocked, though booked volumes have been lower than usual, and they are expected to remain inactive until September. This quarter, a German steelmaker struck lower-priced deals to fill order books. Transaction prices, which have recently followed a similar trend to base prices, were assessed lower due to weak demand and oversupply. The supply chain has become less stressed, and the rate of steel price increases has begun to slow. However, the resulting disruption to energy markets is still causing price volatility, so careful planning is recommended to mitigate risks. This quarter, European steel producers began drastically reducing output, with ArcelorMittal leading the way, recently idling five blast furnaces across its European assets. Thus, the discussion of Al6XN plate (3 mm) prices for Ex Werdohl (Germany) in September settled at USD 25292/MT.
For the Quarter Ending June 2022
North America
Al6XN Plate prices in the US market increased during the second quarter of 2022 due to increased concerns about rising geopolitical tensions, supply-chain disruptions, and growing inflationary pressures. According to market participants, the rate of overall factory growth accelerated for the third month. It was the fastest since September, owing to speedier production expansion, a softer seller performance decline, and a series-record drift in pre-production inventories. Although delivery times lengthened further, suppliers' severe material and capacity shortages led to sharper cost and selling price increases. Despite ongoing inflationary pressures, demand expanded as the New Orders Index grew. Buyers are still confronting higher transportation charges and logistical bottlenecks. Mills have announced price increases to become more competitive with imports along with increases in freight rates as even imports are facing port congestion and higher trucking costs from the ports.
Asia Pacific
In the Asian market, the AL6XN Plate prices witnessed mixed sentiments due to fluctuating raw material prices. In May and June, AL6XN Plate prices surged, and rising nickel prices prompted a rise in Stainless Steel prices, but due to Stainless Steel's weak fundamentals and demand and supply lines, prices remained rangebound. Market participants claim that the coking coal they purchased in April will be used in the April-May production. As a result, production costs are likely to peak in May-June. Furthermore, the Indian government-imposed duties on finished flat and long steel and iron ore to reduce exports and shift mills' focus to the domestic market. Tariffs on coal and ferroalloy imports have also been reduced to contain rising domestic steel prices and lower production costs. Prices fell in June due to lower raw material costs and lower demand. Flawed demand, piled-up inventory, and a drop in iron-ore expenses, combined with the looming overhang of COVID-led disruptions in China and the ongoing hit to exports, are weighing on sentiment.
Europe
In the European market, the AL6XN Plate prices witnessed mixed sentiments. In April, the Russia-Ukraine war and its repercussions kept the prices soaring. However, due to low manufacturing demand and high inventories, AL6XN Plate prices fell in June. Market players cite that the augmented stocks throughout the supply chain are because of the initial panic buying activity. Fearing further price erosion, service centers and distributors resisted purchasing. Manufacturers have continued to suffer as a result of decreased downstream demand. Declining purchasing activity has further shrunk the June offer book. Meanwhile, to attract new customers, the mills reduced their quotation prices. However, long delivery times, the risk of tariffs, and capacity shortages at local ports keep the interest limited. Other factors impacting the market's interest are uncertain demand and price directions. However, the summer maintenance period is swiftly approaching. Producers are raising their outages to control production output by market demand.
For the Quarter Ending March 2022
North America
The AL6XN prices showcased a surging trend in the US market during the first quarter of 2022. According to market participants, the Russia-Ukraine conflict has driven market panic about supply shortages, resulting in soaring raw material prices, especially iron ore and coking coal. Increasing procurement risk, financial constraints, port blockades, growing uncertainty about availability, and rising safety and security concerns are among the significant factors driving sentiment in commodity markets worldwide. The Russia-Ukraine conflict and its repercussions on raw materials and logistics have significantly impacted supply and demand-side movements. However, market participants opted to wait and watch the approach until further clarification of the price trend.
ASIA PACIFIC
In Asian countries, AL6XN Plate prices increased during the first quarter of 2022 due to the increased demand. Rising raw materials and energy prices are primarily driving this upward trend. Amidst this, the extended hostilities between Eastern European nations further increased the cost pressure and inflation rate in the global market, prompting raw material prices to skyrocket. Furthermore, the Russia-Ukraine conflict and repercussions over input materials have impacted the supply-demand dynamics, raw material costs, and the global economy, resulting in a stretched supply chain. However, the robust demand for AL6XN from the downstream sectors kept the market sentiment for AL6XN bullish.
EUROPE
During Q1 of 2022, the AL6XN prices witnessed bullish market sentiments owing to the robust demand from end-users amidst the rising energy prices. Since 2020, energy and fuel prices have been surging, further aggravating increased inflationary pressure. Amidst this, the Russia-Ukraine aftermath, and its repercussions, particularly on raw materials and logistics, resulted in rising inflationary pressures, rising average purchase prices, and output charges. This conflict has severely impacted supply and demand-side movements and caused seller delivery times to lengthen to a near-record high. However, limited transactions and dull market conditions in the global market, with market participants adopting a wait-and-watch outlook for further price trends.
