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Freight hikes ‘may hinder’ stainless scrap movements

Asia – Production of stainless steel has been at elevated levels but, if the normal business cycle is to be followed, there will be a decline during the summer months. China’€™s crude stainless steel output has been ‘€˜surprisingly’€™ high and will create ‘€˜increased levels of final product’€™ in its surrounding region, writes Joost Van Kleef, chairman of the BIR stainless steel & special alloys committee, in the body’€™s latest Mirror publication which has been released at the world recycling organisation’€™s latest convention in Hong Kong.

‘Very tight’ scrap supply and rising prices have prompted several mills in Asia – notably in India, Taiwan and also South Korea – to ‘switch in part from scrap to nickel for manufacturing their finished stainless products’, it is noted.

Smaller mills are being ‘squeezed’ by their larger counterparts which have been offering finished products at competitive prices. Another major factor has been the shortage of containers and vessel space, sparking 80% increases in some shipping rates over the course of only a few weeks.

‘Freight increases have made long-haul scrap movements from Europe and the USA to Asia less viable,’ it is suggested in the Mirror. Indeed, feedback from India indicates freight increases ‘may hinder the country’s scrap import potential, especially regarding material coming from further afield’.

In February and March, India imported a monthly average of around 40 000 tonnes of austenitic stainless steel scrap – ‘or somewhat less than in the past’. Stainless scrap markets in the USA are described as ‘aggressive’, with prices paid by major processors for 18/8 dipping ‘less than 10% from their peaks’.

Export opportunities for stainless scrap ‘remain limited to container shipments for shippers located near coastal ports’, it is added. In Europe, lower nickel values have reportedly hampered the flow of stainless steel scrap on to the market, creating ‘a struggle’ for mills still offering high levels of demand.

In the UK, for example, there has been ‘healthy’ demand for scrap because of mills’ good order books and increasing scrap ratios. In the Middle East, meanwhile, supply of 304, 316 and 410 stainless steel has been ‘tight’ owing to low prices.

‘Most yard owners and scrap suppliers expect the market to pick up in the future and have accumulated stocks of 304 and 316,’ it is ventured. As regards the superalloys market, this year’s first quarter brought continued demand for scrap and further increases in cobalt-bearing alloys.

There has been an increased demand for certain titanium grades.

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

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