On Monday, there was a significant upsurge in nickel prices on the Shanghai Futures Exchange (SHFE) in Asia, surging by over 3.2%. This increase has caused a subsequent rise in stainless steel prices in China. As for aluminium, is the European Union (EU) considering further action against Russia, or will it maintain its previous indecisiveness as seen with semi-finished steel products?

Significant Increase in Asian Nickel Prices

On Monday, the Asian commodity exchange SHFE witnessed a sharp increase in nickel prices, with a substantial gain exceeding 3.2%. The SHFE contract NI2411 consequently climbed to nearly USD 20,000 per metric ton. Nickel's spot prices also experienced a boost, increasing by up to 3%.

Prices on the London Metal Exchange (LME) had already seen additional gains on Friday and continued to rise by more than 1% at the start of trading today, currently surpassing USD 17,200 per metric ton.

Stainless Steel Prices on the Rise

In reaction to the nickel price surge, stainless steel spot market prices in China have also increased. The 300 series, which contains nickel, saw a rise of more than 1%. Additionally, the 400 series, which is nickel-free, also experienced a market sentiment-driven increase of approximately 0.7%.

Aluminium: EU's Potential New Sanctions on Russia

The EU is currently contemplating its 15th round of sanctions against Russia. Along with its posturing towards Russia, potential sanctions on Russian primary aluminium are again under consideration. However, in previous rounds of sanctions, EU member states have struggled to reach a consensus on this issue, leading to repeated delays. It remains to be seen whether the EU will decisively impose new sanctions or once again be swayed by lobbying efforts.

European Steel Manufacturers Purchase Inexpensive Slab from Russia

The EU has generally found it challenging to enforce sanctions on semi-finished products, as evidenced by the case of steel slabs and hot-rolled coil (HRC, HS Code 7208). Although Russia has been a key supplier of HRC to Europe for many years, HRC was quickly targeted by sanctions.

Are EU Sanctions on Semi-finished Steel Products Ineffective?

Not only has the EU created a complex set of sanctions for steel slabs, which are considered a primary product for HRC, allowing imports from Russia to continue with few checks, but it has also set long lead times for certain sanctions to take effect.

Consequently, EU steel manufacturers continue to purchase several million tons of steel slabs (HS Code 7207) of Russian origin at lower prices. At the same time, they attempt to isolate domestic steel consumers from other sources through anti-dumping investigations against HRC. In 2023 alone, 3.1 million tons of Russian slabs entered the EU. The figure for the first half of 2024 already exceeded 1.7 million tons, according to data from the EU's statistical authority EUROSTAT.