India: Imported stainless steel scrap prices edge down amid 5% drop in LME nickel

• Offers still high for most buyers
  
  
• Demand from Europe slows down
  
  

India's imported stainless steel scrap prices dropped by up to $15/tonne (t) w-o-w, driven by a decline in LME nickel prices and weak buying interest. In contrast, domestic stainless steel scrap prices remained unchanged for the week. Overall market activity continued to be sluggish due to weak demand in the finished market.

BigMint's benchmark assessments for domestic stainless steel 304-grade scrap stood at INR 121,000/t ex-Delhi, while the imported variant of the same, originating from the nearshore region, was priced at $1,440/t, CFR Mundra.

LME nickel price trend

At the time of reporting, three-month LME nickel prices stood at $16,940/t, reflecting a drop of 5% w-o-w as compared to the previous week's price of $17,850/t. At the same time, nickel stocks in LME-registered warehouses edged up by 1% w-o-w to 134,322 t, up from 132,390 t the week before.

In a recent update, Indonesia's mining minister stated the country aims to better manage nickel ore supply and demand to support prices. Amid delays in quota approvals, some smelters are importing ores from the Philippines. The government will fix reference prices to ensure fair profits for both miners and industries, promoting procurement from smaller local miners to enhance market balance.

Scrap market insights

Despite a decrease in imported scrap levels, buyers remained hesitant to purchase, as the offered prices were still considered high.

As per BigMint's assessment, current prices of SS 316-grade scrap were at $2,650/t, with suppliers offering the material at $2,660-$2,680/t. Buyers' bids were at approximately $2,580-$2,600/t. Similarly, SS 430 scrap stood at $640/t (down $15/t) and SS 201 was at $750/t (down $10/t) CFR Mundra.

A trader said, "Offer prices for imported material are on the higher side, but buyers are not ready to buy at these levels. Buyers' bids were at $1,380-1,390/t for 304 scrap and $2,540-2,550/t for 316 scrap."

Meanwhile, domestic 304 scrap prices held steady at INR 121,000/t, while SS 316-grade scrap remained range-bound at INR 221,500/t ex-Delhi-NCR on cash payment terms. Sources noted that major mills are purchasing 304 scrap at around INR 124,000-126,000/t DAP with a credit period of 30-45 days.

European market

Demand for stainless steel scrap in Europe has slowed due to high offers, prompting mills to substitute it with semi-finished products such as billets and nickel pig iron. Rising costs are driving this shift. In Italy, stainless steel scrap sales began to decline in September after Acerinox announced a reduction in scrap procurement due to strikes and summer breaks. Furthermore, some scrap dealers' refusal to reduce prices has compelled mills to seek more cost-effective alternatives.

A trader said, "Stainless steel scrap in Europe and Asia is being increasingly substituted with semi-finished products and nickel pig iron due to rising scrap prices and cost-effective alternatives."

Outlook

Stainless steel scrap prices are expected to experience a slight decline in the near term, influenced by falling LME nickel levels. However, domestic trading activity will likely remain low to moderate due to the upcoming festivities, with market participants predicting a demand recovery only after Diwali.