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 prices have made a ′disappointing′ start to 2015 and lower availability is likely to be the result over the coming weeks, forecasts Joost van Kleef of KMR Stainless, the new chairman of the BIR Stainless Steel & Special Alloys Committee. Nickel and stainless prices have been held back by the slower-than-anticipated drawdown of Chinese ore stocks required for nickel pig iron production and the increase in LME nickel stocks of around 25 000 tonnes since the beginning of the year.
In the USA, the strength of the dollar is affecting domestic production and pricing of finished stainless as import competition continues to escalate, with incoming volumes climbing from 106 000 tonnes in December to an estimated 175 000 tonnes the following month. US mills have not been chasing scrap against a backdrop of ′fragile and unpredictable′ forward order books while strong competition from imports has left them with ′a powerful incentive to maintain historically steep discounts′ for whatever scrap they purchase.
Across in Europe, the early-2015 stainless production recovery in Italy has not been as strong as expected while export demand from the Far East has been focused only on certain qualities, notably 316 turnings. Stainless steel production in Italy was lower in 2014, not least because of the long strike at AST that resulted in business being lost to foreign competitors who could provide better guarantees in terms of delivery.
In the UK, conversely, stainless production was higher overall in 2014 – but fell away significantly during the final quarter of the year, thus negatively affecting demand for scrap. A similar production outcome is envisaged for 2015 although ′much depends on the wider macro-economic factors becoming more favourable than they appear to be at present′.
Many scrap merchants are still sitting on stocks built up through the fourth quarter and so flows are ′subdued′. Growth in stainless steel output was ′remarkable′ last year in India, with an estimated 660 000 tonnes of austenitic stainless steel produced for a year-on-year increase of 27%. With India′s appetite for stainless scrap deemed likely to grow this year, the Euro′s recent weakness in relation to the US dollar has rendered scrap imports from the Eurozone ′somewhat more attractive′.
Despite falling stainless scrap values in US dollar terms, the steep currency depreciation in Russia has meant the ruble price remains attractive for local suppliers. ′Major tonnages can be expected to be offered on the international market rather than to domestic mills,′ it is contended.
As for the Middle East, billions of dollars are continuing to be invested in major new projects despite terrorist/extremist activities and lower oil prices. From Jordan, it is reported that yard owners and dealers are accumulating stainless scrap stocks at low prices ′in anticipation of a market pick-up′.
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