November 2022 Nickel & Surcharge Update
Monthly Nickel and Surcharge Update
November 2022 Update
Thanks for reading the Ram Alloys Monthly Nickel and 316L s/c update, intended to help our valued customers make educated business decisions.
Energy Energy Energy - Solved?
- 316L Surcharges decreased in October, not expected. Why?
- Germany's government shows remorse for households as they roll out new energy plan. (see second article below)
- Incentivizing households to use at 75% of normal power with fixed price guaranty
- Theoretically, this will reduce energy demand, allowing more for industrial use
- Other EU Gov't likely to follow
- Effectiveness TBD, as winter starts to take full effect
Current Take
SECTION 232 EU TRQ: Quotas are full and tariffs are being accessed. One strategy is to delay inbound until Q1 2023.
LEAD TIMES: Mixed situation: some mills declined new orders, some mills are opening up new capacity. Our gut leads us to believe the lead times will ease Q2 2023. So although there is a supply/demand imbalance, negatively tilting towards supply (price = increase), that may flip in the near future.
PRICING: While alloy surcharges are far form May highs, Q4 costs, previously predicted to increase, may now stabilize due to:
- Base price increases (yes, again)
- Energy surcharge decrease (gov't manipulation - see articles)
- Flattening nickel
- Import/Export duties
- Supply shortages
- Surcharge decrease
Story to watch in 2022 (update): 2021 Energy and Aerospace demand for stainless steel and nickel alloys, while up from 2020, is nowhere near historical levels. Either sector can substantially disrupt an already discombobulated supply chain with traditional consumption.
Update: Aerospace and energy related metal demand rising further than expected. Pricing and supply will be negatively impacted.
Yearly/Monthly 316L s/c and Ni Charts
Industry News
Click the links to read the articles below:
- Metal markets brace for a downturn of a different kind
- Germany finalizes details of planned gas price cap
- OPEC raises long-term oil demand view, calls for investment
- U.S. manufacturing activity slowest in nearly 2-1/2 years in October -ISM
- Goldman Sachs says Boeing can soar more than 80% after earnings
- The U.S. Diesel Shortage is Worsening
- EV battery production faces supply chain, geopolitical headwinds
- EURUSD extends recovery beyond 0.9900
EU Quota Info
EU Quota System Highlights:
- Quotas by EU country, not mill, and by HTS Code, not grade
- Quarterly volumes based on a first come/first served bases
- Imported volumes > quota assessed a 25% tariff
- Exclusions apply, but adjustments under consideration
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