US stainless steel processor buying prices dropped on Thursday due to a significant decline in LME nickel prices.
The daily Davis Index for scrap 304 solids fell by 4.5¢/lb to 73.5¢/lb delivered processor yard and declined for 316 solids by 6¢/lb to 95¢/lb for single truckloads.
The index for scrap 304 turnings moved down by 3.2¢/lb to 69.8¢/lb and fell for 316 turnings by 5.5¢/lb to 86.5¢/lb delivered processor yard.
LME nickel prices dropped by $1,673/mt from Wednesday with the official three-month LME Nickel contract settling at $16,191/mt on Thursday. The official cash contract closed Thursday at $16,144/mt, down by $1,658/mt from Wednesday.
The LME Nickel market fell to its lowest point since Jan 12 on Wednesday, registering an intra-day low of $17,220/mt. The slide was spurred by volatility in the bond market as well as an outlook of tight supply after Nornickel announced that it would not resume operations at its Oktyabrsky and Taimyrsky mines before March 12.
Stainless steel processor buying prices have therefore declined in tandem with LME nickel prices this week. Processors are cautious and dropping their buying prices due to market uncertainty. Participants are waiting to see how the market plays out after the ferrous market settles before adjusting their prices.