Margin worries for stainless steel scrap traders

Global – Against a backdrop of scant availability, there has been an increase in stainless steel scrap prices over recent weeks. The range for the 304 quality has climbed to US$ 1300-1350 per tonne while 316 material has advanced to US$ 1780-1830. Chrome scrap prices are broadly unchanged at US$ 300-340 and US$ 400-440 per tonne for, respectively, 409 and 430 material.

The strained scrap situation is reflected in the fact that the discount for the nickel content from the LME quotation has shrunk from 28% to 16% over the course of two months. Traders are suffering from very low or even non-existent profit margins at a time when business would normally be a lot brighter.

According to Heinz H. Pariser Alloy Metals and Steel Market Research, the EU’s crude stainless steel production declined by 7% from 2.063 million tonnes in the opening quarter of 2014 to 1.917 million tonnes in the same period this year. Expectations are of growth for the rest of the year given the anti-dumping duty on cold rolled stainless steel sheet from China and Taiwan.

EU stainless steel scrap imports from third countries jumped 16.8% to 58 099 tonnes in the first two months of 2015, with 17 108 tonnes or approximately 30% of the total coming from Russia. EU exports to third countries soared 174.5% to 63 076 tonnes, with the leading recipient being India on 28 866 tonnes followed by Taiwan and South Korea.

The full version of Recycling International’s latest nickel and stainless steel market analysis will appear in its June/July 2015 issue.