India's imported stainless steel scrap prices gain; LME nickel surges over 10% w-o-w

• Domestic scrap prices remain largely stable
  
  
• Bid-offer disparity in imported scrap looks quite significant
  
  

India's imported stainless steel scrap prices saw a notable rise as compared to the previous assessment. The rise in prices was primarily attributed to the increasing trends seen in LME nickel.

Nickel prices for 3-month delivery on LME saw a remarkable 10.7% rise w-o-w, reaching $21,000/t levels, at the time of reporting. Notably, nickel stocks in LME warehouses stood at 81,630 t.

Meanwhile, domestic scrap prices remained largely stable with BigMint's assessment for SS 304 scrap at INR 121,000/t and that of SS 316- grade at INR 213,000/t, ex-Delhi.

A source mentioned, "The domestic scrap prices have still not been impacted. However, going forward India's primary stainless steel producer might further increase finished material prices which might reflect in the domestic scrap pricing."

BigMint's assessment for imported SS 304 scrap origination from the nearshore region rose by $15/t, reaching $1,450/t, CFR Mundra. Meanwhile, suppliers were heard offering scrap at $1,460-$1,480/t levels and the bids were $40-$50/t lower.

316-grade scrap was priced at $2,610/t, moving up by $20/t, CFR Mundra. Offers of 316-grade were heard as high as $2,650-$2,700/t. Meanwhile, buyers' bids were heard at $2,560-$2,580/t levels.

A trader source informed BigMint, "As of now, the bid-offer disparity looks quite significant and buyers are not willing to buy the material at these prices. Additionally, there is a slight shortage of 316-grade scrap in the market, which is further driving the prices on the higher side along side the increasing LME nickel prices."

The bids from Indian mills for imported SS 304-grade scrap were heard at $1,420-$1,430/t levels. At the moment, mill based buyers are currently sourcing scrap from the domestic market as imported material does not seem viable.

A scrap supplier mentioned, "The bids from the European region buyers are heard around $100-$120/t higher than that of Indian buyers. A deal for South American SS 304 scrap was heard concluded at $1,550/t to a German mill."

What is driving nickel prices high ?

LME Ni prices surge past $21,000/t

Nickel prices have surged recently, breaking through the $20,000/t barrier during after-hours trading on the LME on Thursday. This upward trend continued overnight, with prices exceeding $21,000/t shortly after trading began. Asian markets, particularly the SHFE, mirrored this trend, with nickel prices increasing by up to 5.2%.

Scarce availability of Indonesian Ni ore

Several factors are currently driving the increase in nickel prices. These include the limited availability of Indonesian nickel ore and the extended sanctions by the US and UK against Russian raw material exports, coupled with a sales ban on the LME and Chicago Mercantile Exchange (CME).

INSG forecast: Ni production down, demand strong

There has been a significant downward revision in the expected nickel production by the International Nickel Study Group (INSG), while demand for nickel, crucial for stainless steel and EV batteries, remained strong. There was also speculation in April about potential Chinese government stockpiling in response to a possible nickel shortage.

Supply disruptions in New Caledonia

Concerns over supply disruptions due to unrest in New Caledonia have impacted prices. Violent protests over voting rule changes have led to a state of emergency and crippled production from French miner Eramet SA. The economic crisis, worsened by high energy costs and export restrictions, have caused nickel production to plummet and driven major investors away.

Outlook

Looking at the present market situation, imported scrap prices are further expected to increase amid the ongoing geopolitical factors and a similar trend might be reflected in the domestic market as well.