The ISM Manufacturing Index (PMI) continued to decline in October, registering a 50.2 reading from the 50.9 level in September. The new orders metric contracted for the fifth consecutive month, possibly pointing to lower demand in the near future. On a positive note, the price index for materials decreased for the seventh straight month. 

October’s Consumer Confidence reading fell to 102.5 from September’s 107.8 mark. Persistently high inflation, increasing interest rates, and the prospect of recession contributed to the decline. Even with these very real headwinds, consumers indicated increasing sentiment to purchase major appliances, vehicles, and homes.  

In October, WTI Oil registered price gains for the first time since May. Starting the month at $83.63 per barrel, oil rallied on OPEC+ production cuts and U.S. oil export data to close at $88.23 per barrel. The upward potential of oil is uncertain as strict COVID-19 lockdowns in China continue to dampen demand from that economy.   

The online US Oil Rig Count is at 770 which is up 5 compared to last month’s report and up 220 from November 5 of 2021 (a high of 1609 in October of 2014 before oil pricing dropped below $20 per barrel at the end of that year). This key and leading indicator shows the current demand for products used in drilling, completing, producing, and processing of hydrocarbons which all of us use every day as fuel sources and finished products.

Nickel reversed course slightly in October, falling back to August’s average price ($9.95/lb.) The commodity began the month at $9.64/lb., hovered near the $10 mark for weeks, and closed at $9.88/lb. The aforementioned lockdowns in China have curtailed stainless steel production, which negatively impacted nickel consumption. While still in the exploratory phase, Indonesia is considering forming a nickel cartel (like OPEC) to manipulate prices in the future. This is a story worth keeping an eye on. 

Below is the 90 day Nickel Price Trend (US$ per tonne).

Domestic steel mills continued to remain steady in October, as they did in August and September, with no price movements on PVQ plate. It looks less likely that we’ll see any more upward movement in 2022.

Commodity stainless and duplex plate deliveries remain in the 7 to 12-week range, while Nickel alloy plates range from 12 to 26 weeks. Carbon Steel plate mill deliveries reside in the 6 to 10 week delivery range.

Welded tubing –Stainless strip supply has stabilized, keeping smaller quantity deliveries in the 10 to 16 week range, with larger quantity orders still in the window of 18 to 25 weeks. Carbon steel tubing deliveries have lead times ranging anywhere from 12 to 20 weeks when strip is available. Welded nickel alloy tubing ranges from 16 to 26 weeks, with some cases of 30 week deliveries. 

Seamless tubing – Current schedules reflect 10 to 22 weeks or more for carbon steel (26 to 30 weeks for Western European carbon seamless) and 10 to 30 weeks for stainless. Seamless nickel tubing is being offered at the 10 to 12 week delivery window so long as hollows are in stock. If hollows are not readily available, anticipate deliveries of seamless nickel tubing in the 20 to 32 week timeframe. 

The metal market is still in a tremendous state of uncertainty and price volatility, so please don’t hesitate to reach out if you have any questions.  

Here’s the current surcharge chart for 304/304LSS, 316/316LSS, 2205, C276, and 625.

Nickel Prices have had an interesting ride over the past two decades with a low of $2.20/lb. in October of 2001 (following September 11 events) and a high of $23.72/lb. in May of 2007. Surcharges trail Nickel prices by approximately two months, so they would have been at their lowest in December of 2001 (304 was $0.0182/lb.) with the peak in July of 2007 (304 was $2.2839/lb.). 

The chart below illustrates Nickel price by way of U.S. Dollar per Metric ton.  

Here’s the Price Index for Hot Rolled Bars, Plate, and Structural Shapes.