Stainless sector warned to expect more volatility

Asia – Stainless-related raw material markets will remain volatile as the behaviour of major Chinese producers and traders is influenced not only by supply and demand but also by financial restrictions which can lead to surprises, according to BIR stainless steel & special alloys committee chairman Joost Van Kleef.

The committee’s latest World Mirror, released at the BIR convention in Berlin on May 30, reveals that China’s crude stainless steel output increased by 4.8% year on year in the first quarter. In South Korea, meanwhile, scrap ratios have fallen as mills have ‘shied away from importing significant cargoes and domestic availability of scrap has also declined’.

India has been paying the highest prices in Asia for 200, 300 and 400 series stainless scrap although mills have now slowed ‘owing to poor financial situations and to increasing problems in selling finished stainless products owing to weak global demand’. A shift in production to the 200 series ‘is beginning to become more visible’.

In the USA, it appears that rising prices ‘may not be sustainable’ even though ‘the shortage of prime industrial scrap is real’. From Europe too, there are reports of a ‘now-usual shortage of scrap’ and of ‘extremely tight’ supply with ‘low inventory levels’.