Will peaking nickel prices affect stainless steel makers?

Nickel prices have touched their highest level since 1987 on dwindling supply. MC Mathur, Director - Corp Affairs, Jindal Stainless, Bhavin Chedda of Pinc Research and B Ramesh Kumar, CMD of NMDC, explain how this will impact stainless steel makers going forward.

As far as matured markets like Europe and North America are concerned, MC Mathur says that there is a nickel and other ferroalloy surcharge. “There is surcharge on base price and so they pass on to their customer whatever is the average price of their raw material on a particular quarter.”

“It is only in Asia, China, and India that we have spot price and so we have to keep on changing our price as per the nickel moment and that sometimes is good and sometime is bad," he adds.

Bhavin Chedda says that they are positive on Indian steel companies like Jindal Steel. “The nickel shortages and the rise in prices of nickel is hugely beneficial to Indian companies.”

“For Jindal Stainless’ product mix, nearly 70-75% is the chrome-manganese 200 series where the nickel content is less than 4% and so when the nickel prices rises, it leads to higher stainless steel prices and realization. So the company is a beneficiary due to higher realization and higher margins,” he explains

B Ramesh Kumar says all along, Japan and Europe were steel leaders, but in the current scenario, China is becoming a benchmark followed by Germany and South Korean steel maker Posco.

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