July 2023 Nickel & Surcharge Update
Monthly Nickel and Surcharge Update
July 2023 Update
Thanks for reading the Ram Alloys Monthly Nickel and 316L s/c update, intended to help our valued customers make educated business decisions.
LARGE DROP!
- 316L Surcharges drop again, what is causing this?
- Nickel tanks to the new 2023 low
- What is causing the drop? (possible explanations below)
- Moly off 50% in the last 3 months, further decreasing the s/c
- Long lead times are still the main driver for 2023 pricing with demand staying strong
- Lead times are still well into Q4 2024 depending on the grade with some falling into 2025!
Current Take
RAW MATERIAL PRICES: Raw material surcharges dropped somewhere between $0.08/# - $0.10/# depending on grade. Nickel is the main factor in this month's drop, but WHY is it dropping? Could be supply and demand (see the two graphs below).
LEAD TIMES: Long lead times are still the story of 2023 due to high demand, low VAR and finishing capacity, and labor shortages. All grades are into Q3 2024 and beyond. Uncertainty and apprehension to buy may rein them in, but the equal and opposite reaction may be stockouts.
BASE PRICES: Mills continued to keep the same base prices last month. We expect prices to remain level even with surcharges dropping.
SECTION 232: Q2 quota full, some products subject to the additional 25% tariff cost. With the new quarter, many mills will be able to ship the material they are holding. How long will it take for Q3 quota to fill? Keep in mind, the quota system is set to expire this year.
Industry News
Click the links to read the articles below:
- Europe Set To Reach Natural Gas Storage Target Ahead of Schedule
- Column: Global exchange copper stocks sink to 15-year low
- Copper Can Go Up 10 Times, Warns Billionaire Mine-Owner
- Column: Court case shines a harsh light on London Metal Exchange
- China steel exports seen surging to seven-year high as home demand wilts
- New orders and supply chain progress as Paris Airshow grapples with pandemic aftermath
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
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