Stainless steel nickel intake to exceed 2 million mt in 2022: Nornickel

The world’s stainless steel production, forecast at 60 million mt in 2022, will require 2.14 million mt of primary nickel, excluding scrap, Nornickel told S&P Global Commodity Insights May 24.

The bulk of nickel will go into making 8.4% Ni-rich 300 stainless steel series, which are projected to make up 35 million mt of the 2022 stainless total, a Nornickel representative

said. All in all, the stainless steel industry will account for 67.5% of the global primary nickel demand, the representative said.

Of total projected nickel intake, 60% will be in China, where Q1 was marked by the resurgence of COVID-19 and upgrades at leading stainless producer Tsingshan.

Production of 300 series steels in China inched up 1% in January-March, while the output of lesser-nickel-containing 200 series and nickel-free 400 series declined by 18% and 21% respectively, Nornickel said in its forecast released May 23.

The Russian company expects the 300 series production in China to grow by 5% this year, entailing a 10% year-on-year increase to 1.29 million mt in the primary nickel consumption in the Chinese stainless steel sector.

Due to swelling Indonesian nickel pig iron, or NPI, supplies that largely target the Chinese market, the scrap ratio in Chinese stainless steel to decline to 20%, down from 24% in 2021.

In Indonesia, 300 series output jumped 85% last year and continued to grow in Q1. Nornickel anticipates the 300 series production in the country to expand by 12% to 5.6 million mt this year. This total will require 428,000 mt of primary nickel.

Europe, US see surge in stainless imports

January-February saw a 80% year-on-year jump, to 528,000 mt, in EU’s stainless steel imports. Nornickel expects imports into the block from low-cost Asian countries to continue to surge in the following few months despite the 25% safeguard duties applied to quota exceeding volumes.

Europe’s own mills have strong order books for the first part of 2022, but are now challenged by the escalating energy and raw material crisis. And Europe’s stainless-steel production may stagnate as a result, at 7 million mt, with the associated nickel consumption forecasted at 150,000 mt.

The US stainless steel business has so far remained robust in 2022 as mills have been able to pass the rising raw materials costs onto the buyers.

“Considering the still solid demand on the one hand and the rising domestic stainless prices on the other, the US buyers are increasingly turning to imports the same way we are observing in Europe,” the Nornickel representative said.

The country’s 172,000 mt stainless steel imports over January-February almost doubled compared to a year ago. And despite the bilateral deals the US had recently struck with the EU and Japan to replace Section 232 tariffs with a quota system, the share of imports from these regions declined in favor of lower cost materials from Taiwan, India and China.

The business activity may slow down from Q3 though and US FY2022’s stainless steel output may stagnate too, at 2.4 million mt, using 35,000 mt of primary nickel, Nornickel re-estimated.

In the long term, production could be bolstered by the $1 trillion Bipartisan Infrastructure Deal, a generational investment in the US’ transportation network, which prescribes the use of the American-made materials only.

— Ekaterina Bouckley