India: Imported stainless steel scrap prices slide further ahead of Diwali on falling LME nickel
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- Imported SS scrap prices drop ahead of Diwali
- 3-month LME nickel prices drop 5%
- EU, Asian producers substituting scrap with NPI
India's imported stainless steel scrap prices have decreased by up to $40/t w-o-w influenced by falling LME nickel prices and a slowdown in demand. In contrast, domestic stainless steel scrap prices have remained stable for the week. Overall market activity has been sluggish due to weak demand in the finished market ahead of the Diwali festival.
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 $1,420/t, CFR Mundra.
LME nickel price trend
At the time of reporting, three-month LME nickel prices stood at $16,125/t, reflecting a drop of 5% w-o-w as compared to the previous week's price of $16,940/t. At the same time, nickel stocks in LME-registered warehouses edged up by 1% w-o-w to 135,816 t, up from 134,322 t the week before.
China's nickel ore imports fell to 4.57 mnt in September, down 7.4% from August and 23.5% y-o-y. Imports from the Philippines dropped significantly, and a further decline is expected due to the rainy season.
China's ferronickel imports reached approximately 737,000 t in September, up 41.2% from August but down 13.2% y-o-y. This increase reflects the traditional peak season for stainless steel and the need for raw material replenishment, with Indonesia supplying 715,000 t despite a y-o-y decline of 10%.
Scrap market insights
Despite a decrease in imported scrap levels, the transactional activities have continued to remain on the lower side majorly due to the slowdown in the market ahead of Diwali.
A trader source informed, " Scrap stocks were purchased a few weeks ago when prices were lower, and now there are sufficient inventories. Additionally, weak demand in the finished market has led to a slowdown in scrap buying currently. "
As per BigMint's assessment, current prices of SS 316-grade scrap were at $2,610/t, with suppliers offering the material at $2,630-$2,640/t. Buyers' bids were at approximately $2,580-$2,600/t. Similarly, SS 430 scrap stood at $640/t and SS 201 was at $750/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. Sources noted that major mills are purchasing 304 scrap at around INR 125,000-127,000/t DAP with a credit period of 30-45 days.
Other markets
European and Asian stainless steel producers are increasingly substituting scarce stainless steel scrap with higher proportions of nickel pig iron (NPI) in electric arc furnaces or importing slabs from Asia. This trend is driven by rising costs, prompting domestic manufacturers in Europe to seek more affordable alternatives.
Domestic indicative price offers for stainless steel scrap in Europe have risen to $1,330-$1,350/t for 304-grade, while 316 scrap has increased to $2,390-$2,430/t.
In the Vietnamese domestic market, the price for SS 304 scrap is around $1,280-$1,300/t, while FOB prices are approximately $1,450-$1,470/t.
According to sources, the domestic supply of stainless steel scrap in Vietnam has been good. Many market participants have begun producing billets and exporting them, especially to regions where there is a shift towards using stainless steel billets for long products instead of scrap, due to cost-effectiveness.
Outlook
Stainless steel scrap prices are expected to decline slightly in the near term due to falling LME nickel prices. Domestic trading activity is likely to remain low to moderate because of upcoming festivities, with participants anticipating a demand recovery after Diwali.
