India: Stainless steel scrap prices fall w-o-w amid demand slump, limited market activity

• Stainless steel scrap prices dip as demand weakens
  
  
• Holiday slowdown dampens market activity
  
  

India's imported and domestic stainless steel scrap prices experienced a slight decline due to weak demand for both finished products and raw materials. The drop in imported scrap prices also coincided with declining LME nickel levels. With only one week remaining in 2024, market activity has been slow, a typical year-end trend, as participants enter holiday mode, further putting downward pressure on prices.

As per BigMint's assessment, domestic stainless steel 304-grade scrap stood at INR 120,500/t ex-Delhi, while the imported variant of the same, originating from the nearshore region, was priced at $1,370/t CFR Mundra.

LME nickel prices

At the time of reporting, three-month LME nickel prices stood at $15,200/tonne (t), dropping by 6% from the previous week's $16,200/t. Meanwhile, nickel stocks in LME-registered warehouses fell by 1% to 161,238 t from 163,644 t the week before.

The Indonesian government is considering reducing the 2025 nickel mining quota to stabilize falling prices. Despite being the largest producer, Indonesia has seen a 45% drop in nickel prices due to oversupply and weaker-than-expected demand. While foreign producers have halted production, Indonesian smelters face supply shortages and declining profits. A mining reduction could impact the global market, forcing smelters to increase imports and raising nickel prices, creating market tensions.

Market insights

Sources informed that major mills are buying 304 scrap at around INR 123,000-124,000/t, while 316 scrap was priced at INR 220,000-222,000/t, delivered (DAP), with a credit period of 30-45 days.

A trader stated, "Stainless steel scrap demand remains slow due to weak finished demand. As the year-end approaches, demand typically drops, but the market expects improvement during January-February."

As per BigMint's assessment, prices of imported 316-grade stainless steel scrap were stable w-o-w at $2,575/t, with suppliers offering material at $2,600-$2,620/t. Buyers' bids were at approximately $2,550-$2,570/t. Additionally, the 430 grade stood at $615/t and the 201 variant at $725/t CFR Mundra.

A mill source mentioned, "Despite the drop in LME nickel prices, imported offers remain high, and there is currently little interest in booking material at these levels. With prices expected to decrease in the coming weeks, buying activity is likely to pick up once prices become more favorable."

Additionally, export markets have been relatively inactive as the winter holidays have begun, with activity expected to resume after the New Year. This break is likely to further dampen buying activity for imported materials.

US market

Stainless steel scrap prices in the U.S. remained mostly stable, with weak demand ahead of the Christmas holidays. Restocking activity was minimal, leading to a stagnant market. Prices for various grades, including 304 and 316 scrap, held steady, while export prices fell slightly. Nickel alloy prices also continued to decline, influenced by a drop in LME nickel prices. Market participants noted reduced demand, with many opting to purchase only what is necessary to get through the holiday period and into the new year.

Outlook

In the near term, prices are expected to undergo a minor correction, as demand typically weakens towards the year-end. Market participants expect a pick-up in demand after January 2025.