BIR Stainless Steel World Mirror May 2015

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

Stainless steel scrap availability has suffered as a result of the low nickel price levels but competition for supplies and scrap usage ratios remain high, according to Joost Van Kleef of KMR Stainless, chairman of the BIR world recycling body’s stainless steel & special alloys committee. From South Korea, for example, it is reported that a scrap ratio of up to 60% is being targeted by one producer (up from 50-55% previously). But it is added: ‘With a thinner order book for austenitic grades, the producer is shifting the emphasis to ferritic grades.’

The raw material of choice for the stainless steel industry in China remains nickel pig iron, with scrap ratios reportedly steady at around 30-35%. In Russia, the government has been persuaded to change course: it had planned a ban on scrap exports from April onwards but decided against implementation following representations from, among others, the scrap industry.

In the USA, stainless steel mills’ order books have thinned and their scrap needs continue to be satisfied by wholesale processors. Export sales options remain limited but some US scrap dealers are continuing to hold and even build inventories at a time when replacing sold material ‘is not easy’ given tightening availability.

The second quarter has brought a marked stainless steel production increase in Italy and, as a consequence, greater demand for scrap. This development is attributed to a combination of Europe’s anti-dumping provisions against cold rolled flat stainless products from China and Taiwan, as well as a weak Euro and low interest rates. Scrap supply in Italy is deemed ‘poor’, partly because ‘dealers are unwilling to sell at current price levels’.

Furthermore, there has been a drop-off both in the production of new scrap and in demolition projects. Scrap availability has been compromised too in the UK where stainless steel demand has been affected by a strengthening pound in relation to the Euro, thus rendering exports to the Eurozone ‘uncompetitive’.

At the same time, the sharp decline in oil prices has hit long product producers in particular through the delay or even cancellation of North Sea oil projects using stainless steel. As regards stainless steel developments in the Middle East, the region has witnessed weak prices in line with the global market as a whole.

Trading levels have been low, with no significant increase in activity except in Dubai owing to preparations for the World Expo 2020, with particularly strong demand for the 304 and 316 qualities. Since the start of the year, nickel stocks in LME warehouses have increased by some 25 000 tonnes to exceed 440 000 tonnes.