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.
Despite an earlier prediction that global stainless steel production would climb approximately 4% to a record 33.3m tonnes this year, it is now uncertain whether the targeted figures will be achieved ‘as poor third and fourth quarter outcomes are anticipated’, according to Michael Wright, Chairman of the BIR Stainless Steel & Special Alloys Committee.
Healthy demand for stainless steel scrap in the first half of this year has given way to a reduction in requirements although this downturn has been counter-balanced by lower arisings. Lower demand has been particularly noticeable in Asia where the main mills in China are using the alternative of nickel pig iron. As a result, other Asian markets – particularly Taiwan and South Korea – have been in a position to source their scrap needs within the Pacific Rim area.
Scrap stock levels in mainland China are said to remain ‘extremely high’, with most merchants’ yards described as ‘overflowing’. Meanwhile, new factory scrap generation has dropped considerably in South East Asia, with most plants generating 30-40% less than what would be considered optimal levels owing to a lack of orders; no significant revival is anticipated in the final quarter of the year.
In India, stainless mills are operating at around 70-75% capacity utilisation. Availability of scrap has remained good from elsewhere in Asia and from the USA whereas domestic generation has been low.
Across in the USA, the main point of interest for the trade is the potentially game-changing Inoxum (Outokumpu) mill in Alabama where test melts are scheduled to be conducted by the end of this year. The dynamics of the entire US stainless steel industry – including the scrap industry – ‘will eventually be significantly altered’ by this development, it is argued by former BIR Stainless Steel & Special Alloys Committee Chairman Barry Hunter of Hunter Alloys LLC. ‘Changes could extend to reduced exports of stainless scrap from the States to the Asian market, potential imports of stainless steel scrap from Europe to the US Gulf region, and a realignment of our current mill structure.’
It is contended that the new mill will effectively serve to shift the focus of stainless steel production overcapacity from Europe to the USA. In Europe itself, there has been a general weakening of market conditions, with feedback from Germany suggesting that opportunities to generate sufficient margins are becoming more limited.
Scrap dealers in Belgium are continuing to suffer the impact of poor scrap supply from manufacturing activities whereas the scrap market in Italy has reportedly become ‘overexcited by prices that are Euro 30-40 per tonne above the rest of Europe’. And from the UK comes a forecast that domestic production of stainless steel will amount to some 280 000 tonnes in 2012 – well short of the 310 000 tonnes projected earlier in the year.
News from both Russia and Jordan centres on duties. In the case of the former, the authorities are planning to reduce the export duty on stainless steel scrap from 15% to 5% over the course of the next five years. Meanwhile, it is reported from the Middle East that the government of Jordan has yet to approve the cancellation of the US$ 75 per tonne export fee on stainless steel and any ferrous exports. Domestically, trading in stainless steel is low, with the bulk of the demand for 200 series material.
Among the superalloys, forecasts from the aerospace sector regarding titanium demand have been cut appreciably in the last couple of months or so, and predictions for the balance of 2012 are ‘bleak’. At the recent International Titanium Association convention in the USA, producers identified little prospect of any upturn in scrap demand ahead of the second half of 2013.
Secondary titanium demand has stagnated owing to lower production rates for ferritic stainless and steel along with increased scrap availability. Meanwhile, ferro-titanium remains under price pressure, leading to lower scrap values and reduced requirements.
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