Superalloys

LME nickel saw more volatility through last year’s fourth quarter. Low stocks and low liquidity suggest confidence has still not been restored after the fiasco of suspended trading last March. Since November 14 when the LME imposed its 15% daily price limit to stop nickel trading higher, the metal’s averages have hovered close to US$ 28,000 per tonne.

Economic issues still prevail as Western economies try to stave off recession. Fiscal policies are still key, with gearing towards interest rate hikes. The USA has fared better and the Federal Reserve has now slowed the pace of these hikes, whereas the UK and Continental Europe are continuing to sharply increase interest rates. Greater optimism came in November on expectations of China easing its COVID measures.

Molybdenum pricing has jumped to new highs, with the lifting of China’s COVID restrictions again a major factor. Prices are now expected to remain elevated for longer amid constricted supply. Persistent high demand from China, transport troubles in South Korea, disruption in Chile, political unrest in Peru and historically low inventory levels have forced prices higher.

Superalloy manufacturers have extended order backlogs. Their order books are strong and they see this continuing for the foreseeable future. The main nickel alloys like INCO 718 (used mainly in aerospace and oil & gas) are in continued strong demand.

In aerospace news, Boeing has stabilized 737 production at 31 aircraft per month but plans to ramp up to 50 per month by 2025. Not to be outdone, Airbus plans to increase A320 aircraft production from 50 to 65 by the beginning of 2024 and a 50% increase by 2025. There is confidence in aerospace demand and the sector looks set to be booming for some time to come.

Also doing well in the previous quarter were the industrial gas turbine and medical sectors. Superalloy demand forecasts seem robust for 2023.