Global – ‘The market for stainless scrap is set to remain challenging for the rest of this year for both raw material suppliers as well as consumers,’ asserts Joost Van Kleef, chairman of the BIR stainless steel & special alloys committee.
In the second quarter of 2015, he points out, there was a drop in the EU’s total crude stainless steel production despite the anti-dumping regulations imposed on certain Asian producers. Europe has seen ‘an increased structural shortage of scrap’ thanks in part to the falling nickel price and to lower imports from Eastern Europe and other regions owing to greater competition – ‘mainly from India’.
For the UK, a strong pound has continued to undermine the competitiveness of finished product exports into the Eurozone. Domestic scrap demand remains healthy but supply is tight such that ‘competition among merchants is intense whenever material comes onto the market’.
In Italy too, where production of flat products remains strong, good demand for scrap is not being counterbalanced by supply. ‘Many of those holding scrap are reluctant to market those stocks built up over time at higher prices,’ it is noted. ‘Low scrap availability has brought strong purchasing competition among dealers and a decline – or even worse – in operating margins.’
Among stainless steel producers in Asia, the raw materials focus in China has been on domestic scrap and nickel pig iron, such that the country ‘is unlikely to be importing scrap any time soon’. Producers in Taiwan have been ‘hit hard’ by anti-dumping duties in many major export markets and by a decline in domestic demand, although scrap ratios ‘remain relatively high’.
In terms of their export sales, producers in South Korea have benefited from anti-dumping duties imposed on China and Taiwan. In a bid to temper import volumes from China, the government in India has introduced a 2.5% hike in import duties – to 12.5% on iron and to 10% on non-alloyed steel ingots, bars, rods and wires of stainless steel.
India, however, has been – and is likely to remain – a strong marketplace for stainless steel scrap. That said, recent developments involving India’s pre-shipment inspection certificate regime are said to have resulted in ‘chaos’, not least because ‘self-declared’ material must be properly controlled on arrival at port and ‘very limited resources’ are available to achieve this.
Rather than risk cargoes becoming subject to ‘intolerable periods of detention’, the preference in most deals is for a certificate issued under the new rules dating from July 1 this year.
Stainless steel mill demand in the USA is described as ‘decent’, but here too supplies of scrap are reportedly tight, with the strong wholesale competition for scrap and higher nickel units reflected in poor margins. Scrap dealers in the Middle East are reluctant to sell at current price levels and so are building stocks while adopting a wait-and-see approach. And while scrap availability in Russia is considered ‘steady’, difficulties lie in finding a solid and uncomplicated outlet.
This 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.
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