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Superalloys

The good news has continued into the second half of 2023 as superalloy manufacturing remains healthy. Aerospace is leading the way in terms of buoyant demand, with the medical and power generation markets lending support. Lead times for the manufacturing of superalloy products have extended to 12-18 months for certain alloys.

June 2023 statistics for Boeing and Airbus show deliveries at 60 and 72 respectively, with orders at 304 and 902. With a staggering 8000 aircraft on the Airbus backlog, strong demand is clearly set to continue; this situation contrasts sharply with a lacklustre performance from the global stainless steel market which is expected to persist in the near term. While the stainless steel market faces challenges, the aviation sector remains resilient, demonstrating sustained growth and a positive outlook.

Demand might be good, but scrap supply and pricing have been challenging.

Following a good start to the year with nickel at over US$ 28,000 per tonne in January and US$ 26,000 in February, it seems the market was over-optimistic about the economic recovery in China after the lifting of COVID restrictions. Industry leaders such as Norilsk and ING are now projecting that nickel prices will stabilize within the range of US$ 20,000 and US$ 21,000 per tonne for the remainder of the year. This represents a 34% decrease from the beginning of the year.

The uninspiring performance of the global stainless steel market, partly as a result of a slowdown in global manufacturing output, has had a significant impact on nickel prices. Demand for stainless steel, which accounts for over 75% of overall nickel demand, directly influences the metal’s price, particularly in the realm of superalloys.

However, there are positive indicators on the horizon: both the US and Chinese governments have pledged millions of dollars to bolster infrastructure development, which is expected to drive an increase in stainless steel demand. As a result, experts anticipate an improvement in the market by the first quarter of 2024.

After experiencing a substantial 40% decline on the LME since January this year, cobalt’s official cash price has surged 13% in July, its most significant increase since March 2022. Tightness in the market as well as higher demand from the medical and aerospace sectors have boosted investor interest in cobalt, pushing it higher. Given the sustained demand from these sectors, it is anticipated that cobalt prices will continue to rise in the near term. This upward trajectory reflects the market’s recognition of cobalt’s value and its crucial role in meeting the requirements of the medical and aerospace sectors.