Stainless Steel World Magazine June 2023 | Page 46

LME nickel prices and stocks

tonnes LME Daily Stocks SHFE Stocks LME Prices 125,000

USD / t 45,000

100,000

40,000

35,000

75,000

30,000

50,000 25,000

Sources : London Metal Exchange , Shanghai Futures Exchange .

gained market share last year , representing 42 % ( 21 % in 2020 and 29 % in 2021 ) and 28 % ( 18 % in 2020 and 27 % in 2021 ), respectively . In the first quarter of 2023 , production decreased -4.4 % y-o-y , reflecting lower demand , mainly due to subsidy cuts and the peak of the pandemic in the country .

Nickel prices and stocks Lastly , we will briefly analyse trends in nickel prices and exchange stocks over 2022 and the beginning of 2023 . In 2022 , the London Metal Exchange ( LME ) nickel price ( close , cash settlement ) rose 47.2 % from 20,750 USD / t to 30,550 USD / t . The March 2022 disruption event preceded a volatile year . After a few days during which trading was suspended , on 25 March , the LME published an official ( close ) cash price of 35,550 USD / t . After that , prices bottomed out at 19,100 USD / t on July 15 , oscillated between 20,000- 25,000 USD / t until mid-November 2022 , and then trended upwards to peak at 31,200 USD / t on 3 January 2023 . This year , prices moved downwards to 21,895 USD / t by mid-March , followed by a slight recovery , closing at 23,770 USD / t at the end of April . Average monthly prices reflect the recovery in the third quarter of 2022 and a slower first quarter of 2023 . After a low in July ( 21,483 USD / t ), average prices surpassed 25,000 USD / t in November and reached 28,854 USD / t in December . In the first quarter of 2023 prices then dropped to a monthly average of 23,307 USD / t in March . This coincided with news of new class I nickel capacity by Chinese producers , the end of subsidies for EVs in China , reports of slower stainless steel demand , a stronger dollar / RMB exchange rate and economic uncertainty . In April , prices slightly recovered to 23,757 USD / t . Additionally , some analysts commented that there had been a growing divide between LME deliverable class I and class II nickel prices since 2022 . LME nickel volumes have dropped since March 2022 . From January 2021 to February 2022 , the monthly average of lots traded per day was between 60,000 and 90,000 . Since April 2022 , averages ranged between 34,700 and 47,800 . In March 2023 , 37,540 lots were traded per day on average in the LME . Some analysts argued that the less liquid market is linked to the higher volatility in prices . Between April 2021 and the third quarter of 2022 , combined LME and Shanghai Futures Exchange ( SHFE ) nickel stocks decreased from approximately 270,000t to 55,080t . Destocking was slower in 2022 than in 2021 , and combined exchange stocks increased slightly in the fourth quarter of 2022 ( when a total of about 2,800t were added ). Since the beginning of 2023 , the destocking trend has recommenced and exchange stocks decreased at an average pace of about 4,000t per month , ending April at 41,440t . LME nickel stocks reached a historic low of 39,918t on 27 April – the first time LME stocks had fallen below the 40,000t mark since 2007 . LME end-of-month off-warrant stocks in February 2023 were 3,619t . This is in line with the reported figures since 2021Q3 ( hovering between 2,000t and 7,000t ), after declining in 2021Q2 from levels above 20,000t , that were the norm since the LME first started disclosing this figure in February 2020 .

46 Stainless Steel World June 2023 www . stainless-steel-world . net