Members of the Stainless Steel & Special Alloys Committee of the Bureau of International Recycling (BIR) did not have rave reviews to offer about the current status of stainless steel when they gathered in Shanghai in late May 2013.
Several traders who sit on the committee as well as guest speaker Markus Moll of Austria-based Steel & Metals Market Research referred to reduced generation of and demand for stainless steel scrap as things presently stand in 2013.
Reports from the U.S. were generally more favorable than those from Europe and a variety of factors could lead to better times for all by sometime in 2014, especially if the aerospace industry recovers from recent turmoil.
Phil Rosenberg of Keywell LLC in the United States noted that "the re-launch of the Boeing 787 is a good sign for the marketplace,” and that Airbus also has announced new orders. For the past several months, the aircraft alloys metal supply chain had “backed up,” said Rosenberg, as aircraft production slowed down.
Barry Hunter of Hunter Alloys LLC, also in the United States, submitted a report noting that North American Stainless “remains the volume scrap buyer” in the U.S. and that its “order book for June is filling nicely and they will continue to purchase a significant amount of scrap going forward.”
Hunter said the new Outukumpu mill in Alabama (recently acquired from ThyssenKrupp) “is currently running on a limited production basis [and] it has really no influence on the current scrap market” in the U.S.
Gloomier was Ian Hetherington of the British Metals Recycling Association, who said “2013 seems to be another year of challenges” and listed “an overall decline in new car sales; reduced order intakes for stainless steel processors; soft demand for stainless steel in China; and stainless steel production overcapacity [in Europe]” as among those challenges.
Guest speaker Moll backed up Hetherington by saying the European stainless industry “is on its knees at the moment” with most of its producers unprofitable.
He also noted that stainless scrap processors in Europe are not helped by the fact that 83 percent of stainless scrap is consumed on the continent it is generated. Thus, there is no buoyant export market to help fetch a higher price for material.
Moll noted that while China’s copper and aluminum industries have relied on imported scrap, its new stainless mills are able to tap into nickel pig iron sourced from within China.
Some good news on the horizon takes form in the shape of China’s energy woes. It will be increasingly expensive for China to smelt its own nickel pig iron and by 2015 imported stainless scrap may again become competitive.
Moll also commented that the ability for manufacturers to use lower-nickel-content alloys to substitute for high grades of stainless may have reached its peak.
High-grade 300 series stainless alloys made up 80 percent of the market in the late 1980s, noted Moll. That figure has dropped to 56 or 57 percent, but Moll does not see it falling below about 54 or 55 percent.
The 2013 BIR World Recycling Convention & Exposition was at the Pudong Shangri-La Hotel in Shanghai May 27-29.