For the Quarter Ending June 2022
North America
During the second quarter of 2022, Alloy-400 prices increased by nearly 14.6 percent in the US market due to raw material shortages, a constrained supply chain, and an increase in domestic and international demand amid ongoing geopolitical circumstances, price hikes, and supplier delivery delays. Higher freight costs and fewer import options caused Alloy-400 prices to vary widely across regions. However, some Midwest plants saw stock availability in late May, while others waited until June. Meanwhile, the rate of cost inflation has accelerated, with firms passing on higher expenses to buyers in the form of production charges, adding to cost pressures. Higher operating costs and increases in metals, energy, fuel, and transportation have exacerbated price increases during the Ukraine war and China's COVID-19 lockdowns.
Asia Pacific
The prices of Monel in the Chinese market witnessed an increasing trend during the second quarter of 2022 due to soaring prices of raw materials and currency depreciation amidst the ongoing hostilities between Russia and Ukraine. According to Chinese domestic players, raw material supply shortages and China's decarbonization policy caused a structural shift in the market dynamics of Alloy 400. According to participants, the Yuan exchange rate has dropped precipitously since April 2022, and the Yuan's rapid depreciation is due to three significant factors: Lockdowns in China, a rise in the US dollar index as a result of Fed interest rate hikes, have resulted in a substantial drop in exports. Although the Yuan is under severe depreciation pressure, there will most likely be a tipping point when China's manufacturing industry returns to normal. The Federal Reserve's tightening monetary policy and the resumption of overseas manufacturing have exacerbated the decline in exports.
Europe
In the European market, the Alloy 400 experienced soaring market sentiments in the second quarter of 20222, primarily due to increased raw material and energy prices and economic losses caused by the ongoing disputes between Russia and Ukraine. The market quotations heralded a supply deficit that overshadowed the demand outlook. On the other hand, domestic German steel manufacturers were adjusting to rising energy prices and supply issues caused by transportation shutdowns caused by high fuel costs. According to market participants, resurgent demand, precautionary stockpiles, and supply chain bottlenecks have exacerbated raw material shortages and sent prices skyrocketing. Furthermore, the US Federal Reserve is raising interest rates, and European bank interest rates are rising, making product availability in the German market even more difficult. The stakes of continued disruption are high, but problems will take time to resolve, and industries are being hit unevenly. German market participants heard of limited transactions and chose to wait and see, avoiding restocking at high costs.
For the Quarter Ending March 2022
Asia
During the first quarter of 2022, Alloy 400 prices in the Asian market skyrocketed, owing primarily to rising crude oil, energy, and raw material prices, particularly nickel, carbon, Aluminium, and iron ore, amidst ongoing hostilities between Russia and Ukraine. Due to local community protests, the uncertain disruption in Peruvian mining primarily supports the soaring raw material prices. According to Chinese domestic players, two factors causing a structural change in the market dynamics of Alloy 400 are the supply shortage of raw materials and the decarbonization policy in China. Also, the imposition of strict COVID-19 restrictions in China hampered onloading and offloading activities and increased port traffic. The constraints in Shanghai and other Chinese cities are starting to bubble through global supply chains, with some factories being forced to close and delays rising at ports. As a ripple effect, the prices of Alloy 400 for EX-Shanghai settled at USD 17425 per tonne.
Europe
In the first quarter of 2022, the Monel prices in Europe witnessed an inclining trend amidst several factors, primarily COVID-19 disruptions, stretched global supply chains, rising inflationary pressures, and elevated geopolitical tensions. The Russia-Ukraine combat and its aftermath, mainly on raw material and logistics, impacted supply and demand-side activities and compelled market participants to adopt a wait-and-watch policy for further price hikes. The imbalance between raw materials demand and supply outlook significantly contributed to a further rise in manufacturers' purchasing costs during Q1 of 2022. Market participants claim that the rising risk of procurement, limitations in financial support, and port bottleneck are among the significant factors that have driven the sentiments of Monel worldwide.
MEA
In the UAE, Alloy 400 witnessed an increasing trend in Q1 of 2022 due to the extreme volatility in raw materials, especially nickel, iron ore, and copper prices, coupled with the broadened demand-supply gap. Since the beginning of this quarter, the Alloy 400 prices have showcased an inclining trajectory. The Russia-Ukraine conflict and its ramifications and subsequent sanctions on Russian raw materials have hampered all non-essential cargo reserves to and from Russia until more information is available. As a result, nickel buyers in those markets have been forced to avoid Russian raw materials and metals, resulting in a scramble for alternative sources of supply. As a result of growing raw material costs, the market dynamics for Alloy 400 in the UAE have shifted to a bullish trend. As a ripple effect, the prices of Alloy 400 for Ex Dubai were assessed at USD 33313/MT.
