May 2022 Nickel & Surcharge Update
May 2022 Update
Thanks for reading the Ram Alloys Monthly Nickel and 316L s/c update, intended to help our valued customers make educated business decisions.
Sorry for the typo in last month's update, which was supposed to be entitled April, not May. This is May's update.
EV Batteries and LME Speculation:
- We still maintain pricing worries trump supply worries, but recent news from the mills may cause us to flip back to supply scaries.
- Several short articles below discuss EV Batteries and the Nickel market, all are worth a read
-
- Tesla's pivot to LFP batteries may curtail Nickel prices, speculation
- Rising EV battery costs may curtail EV demand, and therefore Nickel prices
- LME Nickel prices dropped and flattened this month
-
- Appears to be supply related
- The next headline could change this...
Current Take
May/June may be your last opportunity to plan for projects in 2023. Consult your preferred supplier and develop a plan, even for just 25% of your expected demand. Small effort will pay handsomely. Planning gives certainty to an uncertain environment, filled with pricing and lead time contingencies.
LEAD TIMES: Some mills have stopped taking orders due to capacity constraints and cost confusion. Some mills are booked through 2024. This could be the beginning of a bubble burst or the continuation of supply chain pain.
PRICING: The domestics jumped on the EU's energy surcharge bandwagon, issuing their own version for May. Such surprises complicate planning and lead to further uncertainty, although they are real costs. June may see a small increase, July and August will be the ones to watch.
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.
Demand has increased in both sectors since our last update, raising prices and increasing lead times further than anticipated.
Yearly/Monthly 316L s/c and Ni Charts
Ni Price History
Industry News
Click the links to read the articles below:
- Tesla battery supplier increases prices due to rising nickel, other costs
- Soaring costs and shortages push German industry to the brink
- President Biden commits over $3 Billion to boost US battery output
- Rising surcharges damper demand, cause EU customer to question base price + s/c model
- Glencore bullish nickel bets squeezing Tsingshan Group short position
- Indonesian government travel to Austin, Texas, meet with Musk to discuss Nickel supply agreement
- Telsa surprise switch to LFP batteries may damper Nickel demand
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
- 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
Ram Alloys is a niche service center supplying a complete inventory of stainless steel, nickel products, pump shaft quality bars, and boat shaft quality bars in a full range of standard grades. Value-added services include comprehensive and customized processing options, prompt shipping, same-day order turnaround, and 24/7 availability. We're here to ensure that your procurement needs are met quickly and accurately, minimizing schedule impacts and return material authorizations. Request a quote today!
