Factors in different parts of the world are combining to make for a difficult stainless steel scrap market.
Although global nickel prices have remained lofty in 2011 and 2012, demand for stainless steel scrap has not always matched expectations, according to traders and recyclers who offered reports at the 2012 Bureau of International Recycling (BIR) World Recycling Convention.
At the May 30 meeting of the BIR’s Stainless Steel & Special Alloys Committee in Rome, traders such as Barry Hunter of Hunter Alloys LLC, Boonton, N.J., pointed to both slow scrap flows and slack demand as concerns.
“Flows of scrap into wholesale yards remain slow,” said Hunter, who cited low industrial production and some scrap dealers holding inventory awaiting higher prices. On the scrap demand side, Hunter stated, “Stainless scrap requirements for April mill deliveries were reduced and May requirements have already indicated a continued reduction in demand.”
Demand from China remains muted. “There continues to be abundant supplies of nickel-bearing pig iron at cost-effective prices” in that nation, according to Mark Sellier, who works from the Hong Kong office of OneSteel Recycling.
While Frank Waeckerle of Cronimet’s Germany office said “demand for clean and homogenous scrap out of processing plants is high” in Germany and some neighboring countries, there also is plenty of worrisome news out of Europe.
“Scrap availability seems to become poorer,” reported Sandro Giuliani of Italy’s Giuliani Metalli. As did Hunter, Giuliani cited “a decrease in manufacturing activities” and that “dealers are reluctant to sell the scrap they have stored at higher values.”
Committee chairman Michael Wright, who works in the United Kingdom for ELG Haniel GmbH, reported slower melting schedules in the U.K. and “a fall in stainless steel scrap availability” similar to the conditions spelled out by Hunter and Giuliani.
Guest speaker Pascal Payet-Gaspard of the International Stainless Steel Forum (ISSF), Brussels, referred to the stainless steel industry as “facing many challenges” but having “a bright long-term future.”
Among the challenges cited by Payet-Gaspard was raw materials price volatility, which makes it “extremely difficult for the industry to guarantee a price” to manufacturers trying to budget the cost of finished goods, he noted.
Another challenge is mill overcapacity in the world’s developed economies and potentially in the future in China, where “a lot of provincial governments are pushing for new plants,” he commented.
Providing long-term hope, said Payet-Gaspard, is the increased efficiency of stainless steel producers who have tried new techniques to cope with market volatility. As well, the stainless industry has become very good at recycling what it produces, with only 18 percent of stainless steel being discarded in landfills, according to a Yale University study and ISSF statistics.
In an ISSF video shown by Payet-Gaspard, the narration notes that in the last 40 years stainless steel production has grown from 3 million metric tons per year to 30 million metric tons per year.
As well, the first patent for stainless steel is just 100 years old, having been obtained in Germany in 1912. After this first century of steady growth for the material, “just imagine what it might make possible in the next 100 years,” the ISSF video noted.
The 2012 BIR World Recycling Convention was May 30-June 1 at the Rome Cavalieri Hotel in Italy.