The Stainless Monthly Metals Index (MMI) rose 5.82% from January to February as the nickel price index lost upward momentum. Nickel prices returned sideways in the short term after finding a peak in January. Since the price has not bounced high enough to confirm an uptrend, downside risk may increase.
Meanwhile, volume levels appear at least partially responsible for current stainless and nickel price action. Overall buyer volume has continued to decline since January. This comes after a much more substantial loss of liquidity in 2022. Now, the rally has not only lost momentum, but there is enough volatility in the market for nickel prices to have no clear market direction at all.
Stainless Inventories Still Elevated
Stainless inventories remain high for service centers, distributors, and end users. Some service centers reported having almost five months of supply on hand. For this reason, stainless buyers may still have a chance to make some opportunistic purchases.
On the other hand, import licenses into the U.S. for cold rolled stainless steel began to decline in July 2022. This was followed by a much steeper decline starting in October 2022. Of course, the U.S. cold rolled market needs some imports.
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