Summary:
In November, the stainless steel pipe market experienced another round of consecutive price declines. Unlike previous instances, this drop in prices had no direct correlation with nickel or scrap materials. The three price drops that occurred throughout the month happened during periods when nickel prices were stable or even rising. The cumulative price drop for 304 pipe billets reached 1500 yuan/ton, reaching an annual low of 15200 yuan/ton by the end of the month, with weak trading conditions persistently present. On the other hand, welded pipe prices remained stable due to the support from the steel plate market, which was bolstered by reduced production and restricted resource releases from the mills. Additionally, the cancellation of export tax rebates brought some positive news, making the fundamentals better than those for seamless pipes.
LME Nickel Futures:
Nickel prices continued to fall in November, with 13 out of 20 trading days experiencing declines. In terms of inventory, there was a continuous increase over 16 trading days. Trading volume remained sluggish except for a brief spike on November 18th. Typically, lower nickel prices should stimulate strong buying interest, but the unprecedented high inventory of over 63,000 tons placed immense pressure on any potential rebound in the nickel market. Regarding demand, domestic importable nickel supplies were relatively abundant in November, while Jinchuan nickel became scarce due to production cuts by Jinchuan Group, only showing slight improvement in supply by the end of the month. As shown in the chart below, the composite nickel price fluctuated slightly around the 11,000 USD/ton mark, while inventories continued to rise, directly exerting significant resistance against any warming or rebound in the nickel market.