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India’s banking issues to hit stainless scrap imports

For Europe’s stainless steel producers, order books no longer appear to be as dynamic as they were in the first quarter of this year while lower-priced competition continues to emanate from Asia, laments BIR stainless steel & special alloys committee chairman Joost Van Kleef in the body’s latest World Mirror publication. ‘Prices for stainless steel scrap remain under pressure – a trend which is likely to be continued during the coming summer months,’ he concludes.

In Asia too, mills’ demand for stainless scrap has been lower in the second quarter than in the first three months of 2018. Stainless processors around Asia have been ‘spooked’ by a reduction in demand coupled with a steady inflow of scrap, it is reported in the Mirror.

‘Taiwan and South Korea have been purchasing only smaller cargoes on long-term contracts, with no spot material purchases expected for the quarter,’ it is noted.

‘Japan’s stainless demand has been the healthiest as construction and other project work continue for the 2020 Olympic Games.’ China’s stainless mills, meanwhile, have been facing competitive pricing from Indonesia’s hot coil imports and from the flood of Indonesian NPI and of nickel ore from both Indonesia and the Philippines.

A ‘drastic’ move

In India, mills have been affected by banking problems following the financial fraud that hit the country’s second-biggest lending bank. ‘The Reserve Bank of India has barred banks from issuing Letters of Undertaking (LoUs) – a form of buyers’ credit guarantee often used between Indian banks and their offshore branches,’ it is explained. This ‘drastic’ move is expected to have negative effects on both Indian imports and exports, at least in the short term.

Already, scrap imports in the first quarter of 2018 had been below the quarterly averages for 2017, with the exception of the 200 series. In the USA, ‘domestic generation of available scrap is currently not capable of meeting historic levels of US mill utilisation’, it is contended. ‘Going forward, continued US production needs will stretch demand for stainless scrap.’

This article is based on the latest World Mirror on Stainless Steel & Special Alloys produced by the BIR world recycling organisation for the benefit of its members.

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