November 2021 Nickel & Surcharge Update
November 2021 Update
Thanks for reading the Ram Alloys Monthly Nickel and 316L s/c update, intended to help our valued customers make educated business decisions.
Quotas Replace 232 Tariff and a New Energy Surcharge:
- As predicted, the USA and EU agreed to a tariff truce, shifting to a quota system.
- Although the terms will soon be negotiated, the true impacts of this new deal may not be quantified until mid-2022.
- November 316L s/c increased to $1.57/lb, which included a new $0.04/lb energy surcharge (the first in over 10 years).
Current Take
Our July 2021 Update mentioned surging Henry Hub prices and how they may impact surcharges. Well, that fear was realized this month with a $0.04/lb energy surcharge. Other mills have warned this surcharge may increase to $0.15/lb in 2022, which is not an exaggeration in our view.
EU QUOTAS: the estimated quota volume is 3.3 million metric tons, greater than 2020 imports, but less than 2017-2019. How this will be allocated and if stainless bar - the lowest usage of all products - will receive any quota is still TBD. Imports that exceed the quota will be hit with a 25% tariff. To qualify for duty-free status, steel must be "melted and poured" in the EU.
Presumably, each EU country will receive a quota, but intra-country mill allocations may not be released for some time. Notably, Britain is excluded from the EU deal, although we believe they will soon announce their own agreement with the USAYearly/Monthly 316L s/c and Ni Charts
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Ni Price v. Ni Stock Comparison
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U.S. Imports by Volume
Industry News
Click the links to read each article:
- U.S. and E.U. Agree to Ease Metal Tariffs Imposed by Trump Administration
- U.S. and EU End Trump-era Tariff War Over Steel and Aluminum
- U.S. and EU Eye Global Coalition to Fix Steel, Aluminum Markets
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