September 2022 Nickel & Surcharge Update
Monthly Nickel and Surcharge Update
September 2022 Update
- Energy surcharge reaches new high, and further increases expected.
- Remember, this is a new "cost" in 2022
- Moly + Iron + Nickel are falling faster than expected.
- This is likely a demand related drop, although the USD is playing a role for Nickel's decline
SECTION 232 EU TRQ: We confirmed that EU steel accessed the 25% tariff during Q2 and, some Q3 TRQs are already full, which means more 25% tariffs. This compounds the current pricing uncertainty and may be overlooked.
LEAD TIMES: Mill lead times continue to extend, and capacity remains extremely limited. One may expect this to change with signs of slowing demand, but that's not what we are being told currently.
PRICING: Although surcharges and raw material elements are dropping, prices remain elevated due to significant increases in base prices, energy, and travel costs. This situation is further complicated by limited mill capacity and tariffs - both Section 232 and new Indian export duties.
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 remain healthy. Increased demand that was forecasted for Q3-Q1 has been confirmed.
Yearly/Monthly 316L s/c and Ni Charts
- Low 4Q demand undercuts brief rally on EU FeMo
- Gas supply woes paralyse Central European steel market
- European Stainless Steel Mills Are Closing Due To Energy Crisis
- Italian long steel producers consider stoppages amid energy crisis
- Outokumpu delays restart of ferrochrome furnace amid high electricity prices
- Asia-Pacific markets trade mixed; dollar index reaches new two-decade high
- US Dollar Index Price Analysis: Overbought levels could spark a corrective move
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
- Link: US Customs and Border Protection Quota Bulletins
- Link: US Customs and Border Protection Quota Utilizations found in its Commodity Status Reports
- Imported volumes > quota assessed a 25% tariff
- Exclusions apply, but adjustments under consideration
- Chaos and confusion are a certainty, clarity sometime late Q1/early Q2
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