The stainless steel industry faces heightened pressures as nickel prices rise, compounded by weak demand in key markets. Experts forecast further challenges for the sector as raw material costs surge.
Market participants indicate that climbing nickel prices are expected to exacerbate challenges for the stainless steel sector, already burdened by weak demand. The latest BIR Mirror report, as published on Recyclinginternational.com, outlines below-forecast performance, citing statements from Joost Van Kleef, chairman of the global recycling organisation’s stainless steel and special alloys committee. According to Van Kleef, nickel prices are buoyed by US Federal Reserve policies alongside China’s recent stimulus announcements. He notes, however, that an uptick in raw material costs may disrupt stainless steel production, given the market’s inability to absorb increased prices amid low demand levels.
Van Kleef reportedly adds that while demand in China remains underwhelming, the threat of incoming finished goods persists. He suggests that stimulus benefits may only materialise once demand improves in both Europe and the Far East. Market disappointments are notable, with Germany’s industrial sector facing scrutiny as Europe’s largest economy is projected to contract, sparking concerns of a prolonged recession.
Adding to the insights, Vagas Young of HSKU Raw Material in Taiwan observes that nickel price trends require time to gauge potential impacts on the physical market. Reviewing Q3, Young mentions stable demand for stainless scrap among Taiwanese mills, though competition from nickel pig iron has pressured prices. South Korean demand is strong, but there’s an influx of hot coils from China as supply continues to surpass local demand. In Japan, domestic stainless scrap demand is steady, although export volumes have shown a slight drop, with the trend expected to continue into Q4.
Young comments that in recent months, India has seen typical levels of stainless scrap demand. Yet, factors such as lower order volumes for finished goods and high interest rates have created a cautious approach among mills aiming to close the year with minimal risks.
