Japanese Hastelloy Price Declines Amidst Inventories Expansion and Plunged International Demand

At the end of January 2024, the price of Hastelloy showed a declining price trend in the Japanese spot market as the surplus availability in the domestic warehouses indicated a downward trend. The consumption from the downstream automotive industries has been on a reducing trend as the Japanese automotive sales have been outcasted by the Chinese auto industries, demonstrating a pessimistic market sentiment. Meanwhile, the trade disruptions through the Suez Canal route have been a major concern for the export of Hastelloy to the overseas US and European region.

In January, the plunging Hastelloy trend was backed by the surplus supply of feedstock Nickel in the domestic and overseas warehouses. The declining Nickel market severely affected Hastelloy’s production cost since the last quarter of 2023. Major nickel mining companies such as FPX Nickel Corp, of Canada have signed a new deal with the Japanese Sumitomo Metal Mining Co., Ltd. for the expansion of Nickel mining. The agreement incurred a cumulative expense of USD 14.4 million for the Japanese mining firm, intending to foster a robust partnership between SMM and FPX. This collaboration is anticipated to support SMM's overarching objective of achieving an annual nickel production target of 150,000 tonnes over the long term.

The demand for Hastelloy from the overseas industries showed a plunging rate as the risks for vessels in the Red Sea have provoked most of the European and US-based buyers to back themselves from placing orders as the increase in lead time and freight charges has posed a negative impact on the trading activity for Hastelloy from the Japanese spot market. Additionally, the domestic consumption for Hastelloy from the automotive manufacturing industry has been dropping rate. The tight competition from the Chinese automakers has surpassed the Japanese auto industry in terms of sales rate. The Japanese market players in the automotive field, such as Toyota and other Japanese makers, including those making trucks and buses grouped in JAMA, have been developing EVs, but they also invest in hybrids, fuel cells, and other types of powertrains, hoping to boost the auto sector in Japan. Meanwhile, the South Korean Trade Commission has also announced lifting the anti-dumping tariff imposed on Japanese-origin stainless steel products, which has previously restrained the trade activity for Hastelloy.

According to the analysis by ChemAnalyst, the price of Hastelloy is expected to remain at a lower rate as the supply of feedstock Nickel is present in excess. Furthermore, the tight competition in the downstream automotive market from the overseas Chinese and US-based products has increased difficulty for the Japanese Hastelloy manufacturers.