During the October 2014 meeting of the Stainless Steel & Special Alloys Committee of the Bureau of International Recycling (BIR), the discussion focused on the condition of the stainless steel market.
The committee also welcomed Joost van Kleef, commercial manager of KMR Stainless, located in the Netherlands, as the new chairman of the committee. Van Kleef replaces Interim Chairman Mark Sellier of OneSteel Recycling, Hong Kong, who had been heading the committee since 2012.
In the market-oriented discussion, panelists focused heavily on the impact Asia is having on the global stainless steel market. Bharat Mandloi of Cronimet ABCOM, Singapore, said Asia’s influence could be summarized in one word: big. He pointed out that Asia produces more than 70 percent of the world’s stainless steel and “definitely drives the market.”
As for China, Mandloi said that while the company was responsible for a substantial share of Asia’s production, the country’s stainless steel scrap use ratio of around 30 percent was far less than the world average of more than 50 percent. The difference, Mandloi noted, was due to Chinese mills focusing more of their attention on using nickel pig iron as a raw material.
Meanwhile, Mandloi said India has become the largest stainless steel scrap buyer in Asia over the last two years, although most of its mills tended to operate on a “hand-to-mouth” basis and did not build large inventories.
André Reinders of Nicrinox, headquartered in the United Arab Emirates, said stainless steel scrap values in India were driven by supply and demand. At the present time, Indian buyers were paying prices up to $100 per metric ton higher than those prevailing in Europe “because they have to convince the sellers to sell” in what he described as a largely spot-driven market.
Reinders described China’s emergence as a stainless steel powerhouse as “phenomenal and rapid.” He added, “If it wasn’t for the 40 percent export tax, we believe China would be a net exporter of stainless steel scrap.”
Reinders said India “has the greatest potential for stainless steel growth” because its per-capita consumption currently stands at 1.2 kilograms (2.6 pounds) per year, compared to 10 kilograms (22 pounds) for China. He remarked, though, that control of the stainless steel markets “will be in the hands of China.”
Tobias Kämmer of the Dutch company KMR Stainless said China was set to produce 22.5 million metric tons of crude stainless steel in 2014, slightly more than half the projected global total of 43.6 million metric tons.
Indonesia’s ore export ban had triggered a spike in the nickel price, but a retreat toward its 2014 low had followed, partly because Chinese stocks were lasting significantly longer than originally anticipated. If the ban continued and the nickel market moved into undersupply over the coming years, China “will lose the era of cheap nickel” and its mills’ competitiveness would come under threat. “The importance of stainless scrap will definitely increase also in China,” said Kämmer.
Meanwhile, the United States was continuing to emerge as a leading importer of stainless steel scrap because of demand growth related in part to additional capacity coming on stream. Scrap volumes entering the United States in the early months of 2014 had been more than 200 percent greater than the same period of 2013, according to Kämmer.