Quarterly Report – February 2021

The major superalloy markets such as aerospace and oil/gas remain weak but nickel pricing certainly doesn’t reflect this: LME cash averaged US$ 15,938 per tonne in the final quarter of 2020, with the monthly averages rising from US$ 15,219 in October and US$ 15,796 in November to US$ 16,800 in December.

The stainless steel market, which accounts for an estimated 70% of the nickel market, has been doing well. China’s stainless steel performance has been up 19% year on year and European production seems healthy, while US manufacturers are wary of increasing production but are choosing to extend lead times - all attributed to rallying nickel levels. 

The superalloy market is seeing expensive scrap with converging stainless units pricing (as Mo and Cr also increase). Will this lead to a tightening of scrap when the markets do see a resurgence? It has definitely led to a huge discount to intrinsic values for consumers who are benefitting from the few-and-far-between orders.

LME cash prices for cobalt, meanwhile, averaged US$ 34,000 per tonne for the final quarter of 2020 and, like nickel, registered progressively higher monthly averages of US$ 33,900 in October, US$ 34,000 in November and US$ 34,158 in December.

Cobalt held fast as Europe overtook China on electric vehicle sales for the first time; sales in December were up 120% from the previous year, with electric vehicles now accounting for 24% of the cobalt market, and growing. The main superalloy market remains weak but prices have been stable owing mainly to tightening cobalt supply.