June 2021 Nickel & Surcharge Update
June 2021 Update
Thanks for reading the Ram Alloys Monthly Nickel and 316L s/c update, intended to help our valued customers make educated business decisions.
Recall the service center cost model: base price + surcharge (s/c). Base prices typically remain fixed (until they are adjusted by the mill), and surcharges fluctuate monthly with commodity prices.
ARE U.S.A. AND EU NEARING A TARIFF TREADY?
- Rumors concerning the reduction or elimination of Section 232 Tariffs against the EU are rampant (see articles below).
- Tariffs against China likely unchanged.
- The logistical mechanics of any potential phaseout remains the largest hurdle (possibly unsolvable).
- How Service Centers like us navigate an un-tariffed market with large, tariffed inventories will be a (welcomed) challenge.
- Of course, we are all subject to the mills' reactions.
Our July 2021 Update mentioned surging Henry Hub prices and how they may impact surcharges. Well, that fear was realized this month with a $0.04/lb energy surcharge. Other mills have warned this surcharge may increase to $0.15/lb in 2022, which is not an exaggeration in our view.
EU QUOTAS: the estimated quota volume is 3.3 million metric tons, greater than 2020 imports, but less than 2017-2019. How this will be allocated and if stainless bar - the lowest usage of all products - will receive any quota is still TBD. Imports that exceed the quota will be hit with a 25% tariff. To qualify for duty-free status, steel must be "melted and poured" in the EU.Presumably, each EU country will receive a quota, but intra-country mill allocations may not be released for some time. Notably, Britain is excluded from the EU deal, although we believe they will soon announce their own agreement with the USA
Click the links to read each article:
- Section 232 Updates
- Chinese efforts to curb inflation
- How volatile is this market? Note the date of each article.
Ram Alloys is a niche service center supplying a complete inventory of stainless steel, nickel products, pump shaft quality bars, and boat shaft quality bars in a full range of standard grades. Value-added services include comprehensive and customized processing options, prompt shipping, same-day order turnaround, and 24/7 availability. We're here to ensure that your procurement needs are met quickly and accurately, minimizing schedule impacts and return material authorizations. Request a quote today!