Imported stainless steel (SS) scrap prices continue to trend upwards driven by higher nickel prices. Demand from Indian mills has started to improve which is supporting the rise in scrap prices. SS market sentiments remain bullish as the country emerges from the lockdowns imposed to combat the second wave of COVID-19. Since May, restrictions subdued end-user consumption and resulted in lower capacity utilization.
Operating capacities are now increasing, which augurs well for scrap demand. Furthermore, the export market for finished stainless steel is predicted to improve. Scrap offers for 304 and 316 have been rising due to high nickel prices. The official three-month nickel contract has jumped up $232/mt in a week to $19,713/mt on Monday, Aug 2. The contract is up $1,580/mt in a month, driving scrap prices higher.
The weekly Davis Index for 304 (18-8) solids, Tuesday, settled at $2,097/mt cfr India port, up $28/mt lifted by higher offers. Mills lowered bids amid slow consumption. Scrap prices are trending at year’s high, and mills are avoiding purchases at these levels to maintain their profit margins. Mills rue that end-user demand has not yet returned to optimum levels. The weekly Davis Index for 316 solids settled at $2,996/mt cfr India port, up by $67/mt driven by higher offers amid a scarcity of the material and higher LME levels. Offers for 316 were heard between $3,000-3,150/mt levels and some rare deals were heard at $2,850/mt levels.
The Davis Index for Zurik 85/3 on Tuesday settled at $1,650/mt cfr India port, up by $5/mt. Zurik prices are up but demand for the grade remains subdued owing to the high offers. Bids for the material are around $1,600/mt, shared market participants. With the rise in LME nickel and copper, sellers are unlikely to settle for lower prices. The official three-month copper contract settled higher by $157/mt to $9,737/mt on Monday, Aug 2 from a week ago. A looming short supply for the grade is also driving prices, traders said.
Lower nickel content grade, 430 solids, also gained. The Davis Index for 430 solids settled at $793/mt cfr India port, up by $24/mt on a hike in offers. Mills are now procuring HMS and are adding ferrochrome to make stainless steel products because SS 430 scrap prices are deemed extremely high. Most mills resisting higher offers. On Tuesday, bids were $50/mt lower than offers at $750/mt. Offers heard at $800-810 levels.
Taiwanese market has remained rangebound in the past two weeks. Prices gained 4-10pc from last Tuesday but could not sustain the uptick this week. Heavy rains and floods in many parts of the country hurt market sentiment and lowered production. With China determined to control the hike in metal prices, production cuts are predictable, furthermore, pollution controls are also a reason for production cuts in the country. The Davis Index for 304 (18-8) solids on Tuesday settled at $1,508/mt cfr Taiwan port, down by $205/mt and the index for 316 settled at $2,115/mt cfr Taiwan port, down by $252/mt from a week ago.