India: Stainless steel scrap prices dip w-o-w as mills halt buying amid weak demand for finished products

• Weak finished demand halts scrap procurement
  
  
• India's SS scrap imports rise 6% m-o-m in Oct'24
  
  

India's imported and domestic stainless steel scrap prices inched down w-o-w. Despite the stability in LME nickel prices, major mills have halted scrap procurement due to enough inventories and weak demand in the finished steel segment.

BigMint's benchmark assessment for domestic stainless steel 304-grade scrap stood at INR 121,000/tonnes (t) ex-Delhi, while the imported variant of the same, originating from the nearshore region, was priced at $1,390/t, CFR Mundra.

LME nickel prices drop

At the time of reporting, three-month LME nickel prices stood at $15,795/t, steady compared with the previous week's $15,775/t. Meanwhile, nickel stocks in LME-registered warehouses edged up by 2.3% w-o-w to 158,046 t from 154,452 t the week before.

In a recent development, Indonesia is restricting nickel ore supplies to protect smaller local miners amid a prolonged slump in global nickel prices. The government has reduced sales quotas and shifted production toward higher-grade ores for stainless steel, which has limited the local supply of battery-grade nickel. As a result, smelters crucial to Indonesia's electric vehicle ambitions have been forced to import more expensive nickel. Indonesia now accounts for over half of the world's nickel production.

Market insights

Imported scrap originating from the nearshore region dropped up to $20/t w-o-w. However, supplier offers remained elevated, while buyer bids stayed lower due to continued weak buying interest.

As per BigMint's assessment, prices of SS 316-grade scrap were at $2,580/t, with suppliers offering the material at $2,600-$2,610/t. Buyers' bids were at approximately $2,560-$2,570/t. Additionally, SS 430 scrap stood at $630/t and SS 201 at $740/t CFR Mundra.

A mill source mentioned, "Buying activity for both domestic and imported scrap has been put on hold, as mills are currently holding sufficient inventories. Additionally, persistent low demand for finished material is reducing the need to actively procure scrap."

Meanwhile, domestic 304 scrap prices held steady at INR 121,000/t, while SS 316-grade scrap marginally dropped to INR 221,000/t ex-Delhi-NCR on cash payment terms.

Sources report that major mills are buying 304 scrap at around INR 124,000-126,000/t, while 316 scrap is priced at INR 221,000-223,000/t, delivered (DAP), with a credit period of 30-45 days.

India's SS scrap arrival

India's stainless steel imports reached 113,115 t in October 2024, marking a 6% increase m-o-m from 107,020 t in September. However, on a y-o-y basis, imports dropped by 20% compared to 141,455 t in October 2023. Notably, 200 series scrap saw the highest growth, rising by 28%, followed by the 400 series at 10%, and the 300 series, which recorded a modest 2% gain. Among the various grades, 304-grade scrap was the most imported, totaling 40,870 t, followed by Zurik and 430 grades. The major suppliers were the US (15,135 t), Thailand (10,780 t), and Vietnam (10,440 t).

US SS scrap market

US domestic stainless steel scrap prices have dropped across several grades, driven by falling nickel prices and reduced market activity as the year-end nears.

The decline was further impacted by decreased activity from Midwest processors, making export prices for 316 scrap, which remained stable, more appealing. Prices for lower grades such as 430 and 409 also decreased. Additionally, nickel alloy scrap prices for 309, 310, 330, Inconel 600, and Inconel 601 have fallen, following the downtrend in nickel prices.

Outlook

Stainless steel scrap prices are expected to experience a slight decline in the near term due to weak demand and ongoing volatility in LME nickel prices. According to sources, the market is expected to remain sluggish in terms of demand as the year end approaches.