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India: Imported stainless steel scrap prices rise w-o-w as LME nickel gains post-US election, rate cuts

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Stainless Steel
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8 Nov 2024, 19:25 IST
India: Imported stainless steel scrap prices rise w-o-w as LME nickel gains post-US election, rate cuts

  • Rising LME levels balance out weak domestic demand

  • Trades slow post-Diwali; pick-up expected in mid-Nov

India's imported stainless steel scrap prices increased by up to $40/tonne (t) w-o-w, influenced by a rise in London Metal Exchange (LME) nickel prices, which offset potential declines stemming from weak buying interest and subdued market sentiments. In contrast, domestic stainless steel scrap prices remained stable w-o-w. Overall, market activity was sluggish post-Diwali.

BigMint's benchmark assessment for domestic stainless steel 304-grade scrap stood at INR 121,000/t ex-Delhi, firm w-o-w, while the imported variant of the same, originating from the nearshore region, was priced at $1,420/t, CFR Mundra, up $40/t w-o-w.

LME nickel prices rise following US election, China's stimulus

At the time of reporting, three-month LME nickel prices stood at $16,325/t, reflecting a rise of 3% from the previous week's $15,840/t. Meanwhile, nickel stocks in LME-registered warehouses edged up by 1% w-o-w to 147,258 t from 146,154 t the week before.

After the US election, nickel prices on the LME rose significantly, following the US election results and the Federal Reserve's 25 basis point rate cut to 4.50%-4.75%. This marks the second cut in a row, amid cooling inflation. However, today, nickel and other base metals dropped following China's disappointing fiscal stimulus, which failed to meet market expectations. Concerns over potential US tariffs under Trump and China's lack of fundamental restructuring further weighed on prices.

Imported scrap prices gain

BigMint's benchmark assessment for imported stainless steel 304-grade scrap, originating from the nearshore region, was at $1,420/t, CFR Mundra, up $40/t from $1,380/t last week.

Despite a rise in imported scrap offers, transactions remained on the lower side, majorly due to subdued demand in the market.

A mill source mentioned, "As far as imported material is concerned, trade activity remains sluggish. Most mills are not actively sourcing overseas material at the moment. Overall, the market remains stagnant. Additionally, there is some optimism that a potential return of Trump could help stabilise the situation and drive greater demand, particularly if the ongoing conflicts come to a close."

As per BigMint's assessment, prices of SS 316-grade scrap were at $2,590/t, with suppliers offering the material at $2,600-$2,620/t. Buyers' bids were at approximately $2,570-$2,580/t. Additionally, SS 430 scrap stood at $630/t and SS 201 at $735/t CFR Mundra.

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.

A trader source informed BigMint, "Both domestic and imported markets are currently slow, but we are hopeful that we will see some improvement following the middle of the month. While nickel prices are rising, domestic demand also plays a significant role in pricing. Until we see an increase in finished product demand in the domestic market, prices are likely to remain largely stable, particularly in domestic SS scrap."

Outlook

Stainless steel scrap prices are expected to stay within a narrow range in the short term, driven by fluctuations in LME nickel prices. Domestic trading activity is likely to remain moderate, with demand primarily based on immediate needs. Market participants are hoping for a demand pick-up around mid-November.

8 Nov 2024, 19:25 IST

 

 

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