Global: Europe's crude stainless steel output climbed significantly in the final quarter of 2016 and is expected to have been 3% higher for the year as a whole. And given generally positive economic growth forecasts, the continent’s stainless producers 'remain optimistic about production volumes' this year such that 'good demand for stainless scrap is expected', confirms Joost Van Kleef, chairman of the BIR stainless steel & special alloys committee. He adds, however, that 2017 is still likely to be ‘a challenging year’ for stainless steel recyclers.
Expectations had been of a ‘very strong’ first quarter in Asia but, instead, softness has afflicted prices of chrome and ferrous scrap.
A number of buyers had built their scrap stocks prior to the Chinese New Year holidays and conditions were expected to improve again following this break.
The demonetisation measure introduced by the Indian government last November impacted domestic scrap flows ‘as many smaller mills in India conduct business on a cash basis’. On the upside, India continues to be ‘one of the most competitive markets internationally for the importation of stainless steel scrap’ and demand is expected to remain strong ‘for the foreseeable future’.
In the USA, mill pricing of 304 and 316 scrap improved in January as a response to elevated ferrous, ferrochrome and nickel values - although declines have subsequently occurred in some of these areas.
‘Major processors continue to compete aggressively for stainless steel scrap and suitable blending items to meet all mill demands in a tight supply market,’ it is noted. ‘As a result, margins are continuously at issue for the processors.’ Export options are said to be ‘limited’ for the USA because of decent domestic demand and the strength of the dollar.
In Europe, the reduced sales terms offered by Italian mills have created ‘a major gap’ between domestic and wider European prices, ruling out scrap imports into Italy from neighboring countries while boosting exports to non-European countries.
Orders for stainless steel scrap have remained healthy in the UK over recent months, with price increases helping to ‘flush out sufficient material to meet this increased demand’.
UK stainless steel production in early 2017 has outstripped that for last year’s corresponding period. Whereas scrap supply in the UK is termed ‘tight’, availability in Russia is hailed as ‘very good’ despite extremely cold temperatures.
Meanwhile, low scrap prices have created a ‘slow and weak’ market in the Middle East. ‘Most scrap yard owners and dealers are diversifying into other business areas while stockpiling large volumes of material in the hope that the market will pick up at some indeterminate point in the future,’ it is observed.
The increase in demand for superalloys towards the end of last year ‘seems to have continued into 2017’, it is also noted.
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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