Skip to main content

Superalloys

The market has continued to be bullish through quarters one and two of this year despite the many challenges still facing superalloy manufacturing. Shipping and transportation in general, staffing issues, lockdowns in China, commodity pricing, global economy issues and supply constraints are all making life difficult for an industry ready to come out of the shadows of the pandemic.

The LME nickel cash average for this year’s first quarter was US$ 20,000 per tonne but the period ended with unprecedented trading conditions - or rather, lack of trading. Developments trace back to the outbreak of the Ukraine conflict in late February, which has had a massive effect on nickel as Russia contributes around 10% to world volumes. In the ensuing days, Tsingshan struggled to make margin calls and bought large amounts of nickel to cover its short positions. With nickel peaking at US$ 100,000 per tonne, the LME waded in cancelled deals and suspended trading. Melters then had their hands full securing stocks of scrap and other raw materials.

But it is not all doom and gloom. Superalloys are seeing demand pick up in the aerospace sector in particular, which in turn will see more scrap becoming available to the market within the next few months. In a move yet to hit the supply chain, Airbus has announced that it is forging ahead with orders and raising production from 45 A320s per month to 64 by the second quarter of 2023. There has been some stocking of materials among superalloy producers recently as shipping and trucking have become all too unreliable.

The industrial gas turbine sector remains positive, with the future looking healthy owing to Russian sanctions and the West becoming less reliant on Russian fuel options.

The cobalt price has seen steady increases: it was 20% higher in this year’s first quarter than in the final quarter of 2021, with no signs yet of it faltering. The LME cash averages for cobalt in the opening three months of this year were US$ 69,950 per tonne for January, US$ 71,000 for February and US$ 80,150 for March, giving a quarterly average of US$ 73,700.

Increases were also recorded in the first quarter by molybdenum, niobium and aluminothermic chrome - just some of the metals used in superalloy production.

Whereas stainless steel demand looks set to slow, superalloys appear likely to remain strong.