Disturbance in overseas nickel mines intensifies, and stainless steel continues to rise along the trend-Zhejiang Benji Stainless Steel Co., Ltd

1、 Raw material report:
1. Nickel: On May 21st, the closing price of nickel in London was $21304, down $311, or 1.44%; The latest price of Shanghai nickel 2407 is 157770 yuan, down 610 yuan, or 0.39%; Shanghai high carbon ferrochrome FeCr55C1000 (50 base) is priced at 8900 yuan/50 base tons. Luoyang molybdenum iron is 251500 yuan/ton, up 1000 yuan.
2. The latest price of stainless steel SS2409 is 14840 yuan, up 345 yuan, or 2.38%; The holding amount is 184266 lots, and the trading volume is 442436 lots.
3. Purchase price of waste stainless steel at Fujian Qingtuo Yongchang Freight Yard:
1) 304 first grade white material (small punch plate, laser material, round steel, edge wire) costs 10150-10200 yuan/ton, and 304 new pipe head edge material costs 10150 yuan/ton.
2) 316 new pipe head corner material costs 18500 yuan/ton, and 316 first grade white material (small punching plate, laser material, round steel, edge wire) costs 18500-18700 yuan/ton.
3) 2205 whiteboard, thick tube, and round steel are priced at 18200 yuan/ton, 2507 whiteboard, thick tube, and round steel are priced at 22500 yuan/ton, and 2520 whiteboard, tube plate, and round steel are to be received.
2、 Wuxi stainless steel plate coil reference price
1. Taiyuan Iron and Steel Hot Rolling Guide Price:
300 hot-rolled series: 15700 yuan/ton for 304/NO.1; 16200 yuan/ton for 321/NO.1; 26100 yuan/ton for 316L/NO.1.
Middle plate (cut edge, thickness: 14-20mm, width: 1500mm) 304 material -17100 yuan/ton, 321 material: 19300 yuan/ton, 316L material: 29000 yuan/ton.
2. Dongte Hot Rolling Guide Price:
S30408 material costs 13800 yuan/ton for 4-12mm and 14000 yuan/ton for 14mm; 14200 yuan/ton for 16mm;
S31603 material: 24600 yuan/ton for 4-12mm, 24900 yuan/ton for 14mm; 25100 yuan/ton for 16mm;
310S hot-rolled flat plate 3, 4mm 34800 yuan/ton, 5-10mm 34000 yuan/ton, 12mm 34300 yuan/ton, 14mm 35300 yuan/ton.
2205 hot-rolled 26100 yuan/ton
3. Qingshan hot rolling: 304 material 13500 yuan/ton; Dingxin 310S material costs 34600 yuan/ton for 3mm, 34700 yuan/ton for 4mm, and 34500 yuan/ton for 5-10mm.
4. Zhangpu guide price: 13900 yuan/ton for 304 material, 16300 yuan/ton for 321 hot-rolled; 316L hot-rolled at 24800 yuan/ton.
3、 Reference price for stainless steel pipes and rods
1. The May price of Qingshan round steel is ? 65-130. S30400 material is priced at 13600 yuan/ton, 316L material is priced at 24100 yuan/ton, TP321 material is priced at 16400 yuan/ton, and 321 material is priced at 15200 yuan/ton.
2. The price of S30400 material in May is 13500 yuan/ton for ? 160-260, and 13600 yuan/ton for ? 300-360. The 316L material costs 24200 yuan/ton for ? 160-260, and 24300 yuan/ton for ? 300-360. 2205 material ? 160-260, 25400 yuan/ton.
3. Yongxing Bar Material ? 65-130: 304 material costs 16700 yuan/ton, TP321 material costs 19200 yuan/ton, 316L material costs 28500 yuan/ton, 316LGB material costs 31500 yuan/ton, S22053 material costs 30000 yuan/ton.
4. [Fukai Market Price]:
1) 2205 (F60) material ? 150-300 round steel 26000 yuan/ton; ? 65-130 round steel 27000 yuan/ton;
2) 310S material: 36000 yuan/ton for ? 150-300, 36500 yuan/ton for ? 65-130; 29000 yuan/ton for 309S material ? 65-130;
3) S32750 (F53) material ? 150-300 round steel 34000 yuan/ton; ? 65-130 round steel 37500 yuan/ton. S32760 (F55) material ? 65-130 round steel 41000 yuan/ton.
4) 316L ? 65-130 round steel at 26000 yuan/ton; 316Ti ? 65-130 round steel 29100 yuan/ton; National standard 316L ? 65-130 round steel 33500 yuan/ton; German standard 316 material ? 65-130 round steel 29200 yuan/ton; 317L ? 65-130 round steel 37000 yuan/ton;
5) 19300 yuan/ton for 321H material ? 65-130; 22500 yuan/ton for 347H material ? 65-130;
6) NO8810 ? 200-250 round steel 73000 yuan/ton; ? 65-130 yuan/ton for round steel.
7) NO7718 ? 200-250 round steel costs 178000 yuan/ton; ￥ 65-130 round steel costs 183000 yuan/ton;
8) NO8028 ? 200-250 round steel 90500 yuan/ton, ? 65-130 round steel 101000 yuan/ton;
9) NO8120 ? 200-250 round steel costs 93000 yuan/ton, ? 65-130 round steel costs 110500 yuan/ton;
10) 630 material (17-4) ? 150-300 round steel costs 16300 yuan/ton, ? 65-130 round steel costs 17000 yuan/ton; 631 material (17-7) ? 65-130 round steel, 19800 yuan/ton; 632 material (15-7Mo) ? 65-130 round steel 29500 yuan/ton;
11) 213000 yuan/ton for NO6625 material ? 200-250; ? 65-130 round steel 217000 yuan/ton;
12) 146000 yuan/ton for NO6601 material ? 200-250; 149000 yuan/ton for ? 65-130.
13) 163000 yuan/ton for NO6600 material ? 200-250; 168000 yuan/ton for ? 65-130.
14) 230000 yuan/ton for NO10276 ? 200-250; ? 65-130 round steel at 235000 yuan/ton;
15) XM-19 ? 65-130 round steel at 38000 yuan/ton;
16) S31254 material ? 65-130 round steel 66500 yuan/ton.
17) 904L material ? 65-130 round steel, priced at 68000 yuan/ton.
18) NO8926/1.4529 material ? 200-250 round steel 91000 yuan/ton, ? 65-130 round steel 81000 yuan/ton,;
19) NO8825 material ? 200-250 round steel 107000 yuan/ton, ? 65-130 round steel 108000 yuan/ton;
20) XM-19 material ? 65-130 round steel costs 38000 yuan/ton, and 15-5PH (XM-12) material ? 65-130 round steel costs 19200 yuan/ton.
21) 173000 yuan/ton for NO3030 material ? 200-250; ? 65-130 round steel costs 178000 yuan/ton.
155000 yuan/ton for NO4400 material ? 200-250;
22) 162000 yuan/ton for NO4400 material ? 200-250; ￥ 65-130 round steel costs 165000 yuan/ton.
23) 1.4460 material ? 65-130 round steel costs 26800 yuan/ton.
24) Wuxi Puheng Forged Round 304L Material: 15600 yuan/ton for ? 140-250, 16300 yuan/ton for ? 260-400; 316L material: 26200 yuan/ton for ? 140-250, 26400 yuan/ton for ? 260-400.
5. [Zhejiang Benji Pipe Reference Price]
Stainless steel seamless pipe 30408 material, specification 25 * 2 * 6000 cold drawn pipe, acid washed and weighed for delivery -26.8 yuan/kg;
Stainless steel seamless pipe S31603 material, specification 25 * 2 * 6000 cold drawn pipe, acid washed and weighed for delivery -39.8 yuan/kg;
Stainless steel seamless pipe S32168 material, specification 25 * 2 * 6000 cold drawn pipe, acid washed and weighed for delivery -30.5 yuan/kg;
Stainless steel welded pipe 30408 material, specification 219-813 * 4-6, acid washed and weighed for delivery -20.3 yuan/kg;
Stainless steel welded pipe S31603 material, specification 219-813 * 4-6, acid washed and weighed for delivery -33.3 yuan/kg;
Stainless steel welded pipe 32168 material, specification 219-813 * 4-6, acid washed and weighed for delivery -25.9 yuan/kg.
4、 Statistical data:
According to Mysteel research:
As of May 16th, the total amount of domestic stainless steel drifting in the sea was 53550 tons, with a total of 18 ships, an increase of 46650 tons compared to the previous period, with 43550 tons from Fujian port and 10000 tons from Jiangsu port.
From May 9th to May 16th, the total amount of stainless steel unloaded at the port for domestic trade was 37024 tons, an increase of 7089 tons compared to the previous period; Foshan has 20070 tons, an increase of 20070 tons compared to the previous period; Wuxi has 16954 tons, a decrease of 12981 tons compared to the previous period; 37024 tons from Fujian port and 0 tons from Jiangsu port. (Jiangsu Steel Factory often uses small boats or cars for shipping to Wuxi, which is not within the monitoring range)
5、 Market analysis
On May 15, 2024, due to a social incident in French New Caledonia, French President Macron announced the implementation of a state of emergency in New Caledonia. New Caledonia is one of the major producers of global nickel resources. According to data from the United States Geological Survey, in 2022, New Caledonias nickel reserves were 7.1 million tons, accounting for 6.96% of the worlds total, and its nickel ore production was 190000 tons, accounting for 5.76% of the worlds total. In 2023, China imported 151500 tons of nickel iron from New Caledonia, accounting for 1.79% of the annual import volume; Imported MHP of 160600 tons, accounting for 12.16%; Imported nickel ore reached 3162400 tons, accounting for 7.07%.
New Caledonia is a French overseas territory located in the South Pacific, mainly composed of the island of New Caledonia and the Loyalty Islands. It was discovered by British navigator James Cook in 1774 and became a colony of France in 1853. In 1946, it became a French overseas territory. In December 1986, the United Nations General Assembly passed a resolution and New Caledonia was included in the United Nations list of Non Self Governing Territories.
The nickel industry is a pillar industry in Xinjiang, contributing significantly to GDP growth. According to USGS data, in 2022, New Caledonias nickel reserves were 7.1 million tons, accounting for 6.96% of the worlds total, and nickel ore production was 190000 tons, accounting for 5.76% of the worlds total. The nickel ore in Xinka is mainly laterite nickel ore with high grade, mainly exported to Asian countries. The export products are mainly nickel iron and nickel ore, among which nickel iron is different from Indonesias NPI. Xinka mainly produces Feni. In 2023, China imported 151500 tons of nickel iron from Xinjiang, accounting for 1.79% of the annual import volume. It also imported 3162400 tons of nickel ore from Xinjiang, accounting for 7.07%. Overall, the proportion is not high. However, due to Chinas dependence on the Philippines for nickel ore imports, and the seasonal fluctuations in Philippine nickel ore shipments, there is a decline in nickel ore imports during the Philippine rainy season each year. Therefore, during this period, the supply of nickel ore in New Guinea has become an important supplement. Customs data shows that from December to March of the following year, the proportion of nickel ore imports in New Guinea will increase to around 15% of the total import volume, while the proportion in other months will remain around 5%.
Previously, New Caledonia had three major nickel smelting projects, namely Eramets SLN, Glencores KNS, and Prony Resources. However, due to the significant decline in nickel prices in the early stage, the cash costs of Western mining companies have gradually been penetrated, and since the second half of 2023, the operation of three projects has been facing difficulties.
According to Echmanns 24Q1 annual report, the nickel ore production of its SLN project was 1.014 million wet tons, a decrease of 32% year-on-year in 23Q1. However, Eramet itself did not want to provide funding for SLN, but hoped for assistance from the French government. In April, Eramet had a dispute with the local government over SLNs financial guarantee, which led to SLNs temporary shutdown.
Similar to Eramet, although Glencore holds a 49% stake in KNS, it also refuses to provide further funding support for its nickel business in Newcastle. Although the French government has stated that it can reduce KNSs annual energy costs by about 200 million euros, Glencore believes that even so, KNS will still find it difficult to achieve profitability. Finally, on February 12, 2024, Glencore announced that it will close and sell KNS shares, resulting in a 6-month shutdown of the factory.
Prony Resources is a local mining enterprise in New Caledonia, with 51% of its shares held by local authorities and other local interest groups. Trafigura holds 19% of the shares, while the remaining shares are held by a joint venture between Prony and investment company Agio Global. Its main nickel project in New Caledonia is VNC purchased from Vale in 2021. Similar to the two projects mentioned above, Prony Resources is currently facing cash shortages due to the sharp drop in nickel prices and is looking for assistance from the French government.
From the perspective of smelting, China does not rely on imports of nickel iron from New Caledonia, but it has a certain share of imported MHP; Although the overall proportion of nickel ore imports throughout the year is not high, from a seasonal perspective, when the Philippine rainy season leads to a decline in domestic nickel ore supply, New Caledonias nickel ore imports will play an important supplementary role in domestic supply.
Previously, the market was concerned about a shortage of nickel ore supply in Indonesia, and the shutdown of nickel mines in New Caledonia catalyzed the rise in nickel prices. However, the impact on the local smelting end may not be significant. In 2023, the rapid decline in nickel prices caused overseas nickel companies to experience losses in production. The three projects mentioned above had already been basically shut down as early as the first quarter of 2024, as it was difficult to wait for assistance from the French government. Specifically, due to the inability to reach an agreement with the local government on financial guarantees, Echmann SLNs production capacity was temporarily shut down; The Glencore KNS project was closed by Glencore on February 12, 2024, and Glencore is also seeking equity sales; The Prony Resources VNC project is currently experiencing a cash flow shortage due to a significant drop in nickel prices in the early stages. Although the New Caledonia incident has intensified market concerns about the mining end, its impact on the smelting end is not significant.
On May 20, 2024, Indonesia released the latest progress on the approval of the RKAB (Indonesian Mineral and Coal Mining Business Activity Work Plan and Budget Report), which shows that the current publicly announced quota is 217.6 million tons, with a total of 92 submitted applications approved, accounting for 26.21% of the total submitted applications. If there is no RKAB quota, local mining companies will not be able to legally mine nickel ore.
At present, the quota approved by Indonesias RKAB is valid for 3 years, indicating that the 217.6 million tons of nickel ore quota will not be fully used for mining in 2024, and the approval process is still slow. From the perspective of impact, due to the tight nickel mines in Indonesia, the market will provide a high premium on the basis of HPM (Indonesian domestic nickel ore benchmark price) in actual trading, which will further drive up nickel iron cost support and further boost nickel prices.
The rebound in macro expectations combined with supply side issues has led to a recent strong trend in nickel prices. However, there are still three major uncertainties in the later stage:
Firstly, the fundamental data of the US economy tends to weaken. If inflation resilience remains stubborn, the risk of stagflation will increase;
Secondly, the supply side concerns caused by the New Caledonia incident have been partially reflected by the market, and there may be a suspicion of over pricing in the short term;
Thirdly, Indonesia is currently in a transitional period after the general election, and the development of nickel resources in Indonesia is one of the governance goals of the new government. The unstable policy expectations may extend to the industrial level, leading to risks.

Zhejiang Benji Stainless Steel Co., Ltd.,