AMM is seeking feedback on a proposal to amend its assessment for nickel scrap, nickel-chrome-copper alloys and nickel-chrome-iron alloys that are used as blends in the stainless steel industry.
An initial consultation with market participants has indicated support from several large dealers, broker/processers and mills, who have expressed interest in using AMM prices in commercial contracts after the following changes are made.
AMM currently assesses six grades of nickel scrap: new nickel clips and solids, nickel turnings, new nickel-copper alloy clips and solids, nickel-copper alloy castings, nickel-copper alloy turnings and shavings and nickel-chrome-iron alloy solids. These products are priced twice per month in 16 cities using market inputs and formulaic adjustments.
After extensive market outreach over the past nine months, there is evidence that the current AMM grades and methodology are too broad to derive assessments that can be widely as benchmarks by industry participants.
Given this, AMM intends to delist the grades noted above and replace them with more precise specifications that will be priced using more robust methodologies.
In nickel scrap, AMM intends to list nickel scrap solids and nickel turnings.
In nickel-chrome-copper alloys, AMM intends to launch Monel R-400 solids and clips; Monel R-400 turnings; Monel K-500 (castings) clips and solids.
In the nickel-chrome-iron alloys, AMM plans to list Inconel 600 scrap clips and solids, Inconel 601 scrap clips and solids, 309 stainless steel scrap solids, 310 stainless steel scrap solids, 330 stainless steel scrap solids and Invar scrap clips and solids.
For the full specification and chemistries of these grades, please click here.
For all of these new prices, AMM will list the dealer and broker/processor prices for Pittsburgh, Chicago, Houston and Detroit.
Limiting the number of cities will streamline the reporting process, but more importantly will mitigate the need to rely on regional formulaic normalization.
Additionally, it was clear during the initial consultation that the market demands broker/processor prices in addition to dealer prices. This adjustment will make AMM’s prices more useful for the entire stainless steel value chain.
The methodologies for these new prices entail a combination of market inputs, which can include transactions, as well as bid/offer and intrinsic values for nickel, chrome, copper and iron units.
Intrinsic values will be determined by using market participants' base metal values for each element multiplied by the nominal value of each alloy, excluding residual values.
The intrinsic values will be used to confirm the market inputs and to ensure market accuracy, and enable readers to calculate both increases and decreases in market values as the market changes.
In the future, AMM also plans to expand further into the pricing for alloys via other high-temperature materials with a high nickel content, such as the nickel complex alloys that contain cobalt.
Another phase could include low-nickel alloys that are now kept separate from the ferrous materials and shipped to the specialty steel industry.
To discuss the consultation and points outlined above in further detail, to organize a meeting or to contribute to AMM’s price discovery, please contact nonferrous editor Tom Jennemann at email@example.com or stainless steel scrap reporter James Lawrence at firstname.lastname@example.org.