Solid nickel pricing does little to help stainless scrap pricing

While nickel prices have been performing well on the London Metal Exchange (LME) as of mid-September, that performance has done little to help stainless steel scrap prices, said Joe Pickard, chief economist for the Institute of Scrap Recycling Industries (ISRI), Washington, during the association’s 2018 Commodities Roundtable Forum in Chicago in early September.

In August, nickel averaged $13,425 per metric ton on the LME. That compares with an average price of $12,872 per metric ton in January. ISRI notes in its “Weekly Market Report” email dated Sept. 17 that the LME official three-month asking price for nickel through Sept. 14 increased by 2.4 percent. The three-month asking prices for the other nonferrous metals—zinc, lead, copper, aluminum and tin—through Sept. 14 decreased, with lead sinking the most at 28.7 percent and tin the least at 3.8 percent. Aluminum and copper decreased by 8.8 percent and by 17.1 percent, respectively.

While ISRI notes in its “Weekly Market Report” that nickel pricing is the primary driver for stainless steel pricing, it adds that stainless scrap prices have trailed behind primary and finished stainless pricing, which also has been the case for other recyclables in 2018.

Stainless scrap pricing declined in the third week of September. According to American Metal Market’s (AMM’s) assessment for broker/processor buying prices in Pittsburgh as of Sept. 20, Type 316 stainless scrap solids were selling in a range of 72 to 75 cents per pound, which is 3 cents per pound lower on the low side and 4 cents per pound lower on the high side compared with pricing for Sept. 17. As of Sept. 20, Type 304 stainless turnings were selling for 40 to 47 cents per pound, which is 5 cents less on the low side and 1 cent less on the high side compared with Sept. 17. Pricing for Type 304 stainless scrap solids also inched downward by 2 cents overall to 51 to 53 cents per pound.

The recent softness in the ferrous scrap market likely will be a further drag on the stainless scrap market, Pickard said.

Citing a figure from the Brussels-based International Stainless Steel Forum (ISSF), Pickard said the U.S. produced 2.75 million tons of stainless steel in 2017. About 78 percent of stainless production in the West is made using scrap, he added, again citing the ISSF.

In the first half of 2018, Pickard said the U.S. exported 388,825 tons of stainless scrap, of which 175,463 tons went to Canada. That’s 240 percent more stainless scrap than the U.S. shipped to Canada during that same period in 2017. At 8,856 tons, Vietnam’s purchasing of U.S. stainless scrap increased by nearly 8,400 percent, while Belgium’s imports grew by 1,230 percent to 3,475 tons during the first half of 2018.

At 46,693 tons, China imported 23 percent less stainless scrap from the U.S. in the first half of 2018. Taiwan also took in nearly 23 percent less U.S. scrap, decreasing from 62,964 tons to 48,727 tons, according to the figures Pickard presented at the roundtable.