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Via Metal Miner
Overall, the Stainless Monthly Metals Index (MMI) continued to decline, with a 4.47% drop from July to August.
Nickel prices continued to plunge throughout July, shedding an additional 4.43% over the course of the month. Although prices appeared to stabilize in early August, they continued to trend near their early 2024 range, having wiped out all gains from last quarter’s speculative uptrend.
Service Centers Report Slow Stainless Demand
Stainless steel remains a buyer’s market. For months, stainless steel distributors have reported little optimism within the market. Sources noted slowing demand as the summer lull approached, while plunging nickel prices left buyers with zero incentive to purchase ahead amid a rapidly declining stainless surcharge. You can read more, including our nickel price forecast and buying strategy, in MetalMiner’s August Monthly Metal Outlook.
Among those reporting weakness, Ryerson’s quarterly financial results showed a slowdown in stainless steel shipments during the quarter. Although its aluminum and carbon steel segments seeked out modest growth both quarter over quarter and year over year, its stainless segment declined due to demand conditions remaining soft.
According to the report, Ryerson’s stainless shipments witnessed a sharp 4.9% decline from Q1 2024, which suggests market conditions worsened throughout the year. While summer months typically experience slower demand, Q2’s results worsened from the previous year, with a 1.7% decline from Q2 2023. Ryerson’s results echo sentiments from other distributors, which have noted soft conditions, particularly for materials like 304.
Slow End-Use Demand Drags Market
The ongoing manufacturing recession remains a drag on overall metal demand. Moreover, the ISM Manufacturing PMI showed manufacturing activity fell deeper into contraction during July, dropping from 48.5% in June to 46.8. Aside from a short-lived return to growth in March, the PMI has largely held within contraction territory since late 2022.
As a leading indicator for industrial metal demand in the U.S., the worsening results in July suggest the manufacturing sector will offer no support to metal prices in the near term until conditions begin to recover. Although the effect will be lagging, eventual rate cuts from the Federal Reserve will offer support to the overall sector.
Source: MetalMiner Insights, Chart & Correlation Analysis Tool
Food service equipment manufacturer Middleby, a leading end-user for 304, continued to report challenged conditions during Q2. Overall, net sales fell 4.7% due to annual declines in all major segments. Meanwhile, commercial foodservice, residential kitchen and food processing equipment sales fell by 4.1%, 6.2%, and 4.9%, respectively.