BIR – The following article is based on the latest Stainless Steel & Special Alloys World Mirror produced by the BIR world recycling body for the benefit of its members. Att www.bir.org, members can read the complete world mirror
Global stainless steel production reached an all-time record of approximately 33 million tonnes during 2010 and most experts are forecasting an increase to more than 35 million tonnes this year, reports Michael Wright of ELG Haniel GmbH, Chairman of the BIR Stainless Steel & Special Alloys Committee.
In what he describes as a “roller-coaster ride” for the sector, global demand for stainless steel raw materials faded in the fourth quarter of 2010 as consumers depleted their inventories, before a “dramatic” resurgence in demand was experienced from all areas – “apart from China” – which lasted into the second quarter of 2011. Scrap availability has mirrored developments in stainless steel production over recent months such that there has been adequate supply of material.
However, “caution” is being exercised with regard to forecasts for the third quarter because of short-term order patterns for finished products as well as holiday factors, Mr Wright notes.
Despite earlier predictions of firmness throughout the first half of 2011, stainless steel mills’ order books in the USA appeared to slow “overnight” in March this year, with their purchases of 18/8 scrap for April delivery substantially reduced when compared to previous months. Uncertainty over future demand for stainless materials has effectively boosted “spot” business for stainless scrap.
Across in Asia, stainless steel mills in China are running at 70-80% capacity (approximately 45% 300 series, 25% 400 series and 30% 200 series); production remains heavily reliant on nickel pig iron while scrap ratios are around 20-25%. Production in Taiwan is reported at 60-70% capacity with a scrap ratio of 50%; the corresponding figures for South Korea are, respectively, 60-70% and 45-50%. Meanwhile, stainless scrap exports from Japan have virtually stopped because buyers are worried about the risk of purchasing contaminated material.
During recent months, large scrap volumes have flowed into India from the USA, Europe and elsewhere in Asia to help feed the “very good” production levels at most of the country’s stainless mills. Despite on-going unrest in the Middle East, meanwhile, demand for stainless steel, chrome steel and iron has remained firm.
Across in Europe, lower availability of scrap in Germany is corresponding to lower demand from the steelworks in May and June. In Spain, stainless production was reasonable in the first quarter of 2011 but is expected to show a decline in the second quarter as the country’s stainless output suffers alongside an economy still blighted by a relatively high unemployment rate and almost no growth. In France and Belgium too, demand from steelworks was particularly strong in the first quarter but a period of uncertainty has now developed – not least because the summer season downturn is imminent. Steelworks in Italy are suffering from competition from elsewhere in the world; the country has recorded a sharp increase in imports from China, thereby negatively affecting domestic steelworks’ profitability. Furthermore, steelworks inspectors in Italy are being stricter on quality control and their attempts at reducing melting losses are making dealers’ lives harder.
In Scandinavia, all mills appear to be experiencing healthy production levels at around 80-90% of capacity, with Outokumpu, for example, delivering 380 000 tonnes in the first quarter of 2011 – which is equivalent to 14% more than in the same period of 2010. In the UK, the same company expects to increase its production by 10% this year to over 300 000 tonnes.
In other stainless-related news, efforts by the government in Russia to restrict stainless scrap export operations to three ports – namely Azov, Kaliningrad and Magadan – have been countered by concerted lobbying from a number of domestic and international organisations, including the BIR. However, this legislative uncertainty and staff changes at the St Petersburg customs office led to almost a complete month without scrap export sales, prompting prices to fall and some traders to sell to domestic mills.
Among the superalloys, secondary titanium demand has steadied and appears set to be in a tight trading range for the foreseeable future while melt rate forecasts remain good through the third quarter for the nickel-based alloy sector. Meanwhile, the high speed steel and tungsten carbide markets are described as strong.
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