While the recent rise in global nickel prices has helped Taiwanese stainless steel firms boost their prices — and revenue — they are concerned that large fluctuations in nickel prices could affect orders.
Global nickel prices have soared 56.72 percent since June, from US$11,500 per tonne to US$18,023 on Tuesday, data from London Metal Exchange showed, after top nickel producer Indonesia last week said that it was considering curbing exports early next year.
Nickel accounts for more than half of the cost of stainless steel products.
While a steady rise in nickel prices has boosted stainless steel prices, clients have become more conservative about placing orders, a Froch Enterprise Co (彰源企業) public relations executive said by telephone on Tuesday.
“The rapid increase in nickel prices is abnormal and not good for steel companies,” said the official, who asked to remain anonymous.
“We still expect nickel prices to increase gradually in the second half of this year, which would reflect in our sales in the fourth quarter as there is a two-month time difference between placing orders and shipping goods,” the executive said.
The company has invested NT$250 million (US$7.97 million) in expanding the capacity of its plant in Yunlin County’s Douliou City and spent NT$75 million in increasing the output of a plant in Wuxi, China, aiming to boost overall monthly capacity from 16,000 tonnes this year to 18,500 tonnes next year, he said.
Major stainless steel supplier Yieh United Steel Corp (燁聯鋼鐵) first raised its product prices by NT$1,000 per tonne in July, then by NT$4,500 per tonne last month and said prices would rise by NT$3,000 per tonne again this month as a result of the increase in nickel prices.
To secure a steady supply of nickel and lower manufacturing costs, the company plans to build a new plant in Indonesia in the middle of next year, a Yieh United official said by telephone.
The official would not give a timeline for the plant’s construction, saying only that the company aimed for an initial annual capacity of 1 million tonnes of stainless steel.
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