Current situation:

• Input prices into stainless PFF are mixed. LME nickel inventories hit 6-year lows again in May at just below 165,470 tons (179,000 in the last update), a continued downward trend.  Spot nickel prices were trading in the $5.41/lb. range in mid-May ($5.87 in the last update). There is nothing suggesting a return to the 2018 peak of just over $7/lb. hit in June, but little to suggest another December trough of $4.81/lb.

Key factors that could affect supply or price:

• As mentioned last month, global demand has softened enough in Asian and European markets to keep prices softer. Manufacturing demand was expected to improve in the coming quarters but there has been more skepticism regarding that growth as Europe and China face slowing economic growth. 
• MEPS forecasts global stainless-steel output will rise 4.7% in 2019, weaker than the 2018 output estimate of an increase of 7.6% Y/Y at 51.75 million tons. Yet, if these estimates hold, it would still remain a record year for global output.