Stainless Steel & Special Alloys – Quarterly Report July 2024

As ever, the summer period in Europe is set to be characterized by reduced output of stainless steel and therefore a lower demand for scrap. And this drop in momentum will add to what has already been a challenging year for the sector, it is claimed in the latest World Mirror publication released by the BIR Stainless Steel & Special Alloys Committee.

Already in 2024, one of Europe’s leading four flat producers has been hit by a strike lasting more than 100 days. Meanwhile, stainless steel scrap has become relatively expensive, particularly in comparison to Asia’s favoured alternative of nickel pig iron. The profitability of leading stainless flat producers in Europe is still under pressure, it is contended.

For the rest of this year, stainless production is expected to reflect the current outlook for Europe’s economies which are expected to move sideways, if not lower.

In the second quarter of 2024, Taiwanese mills’ demand for stainless steel scrap continued to be slow, with average monthly imports of hot rolled coils jumping from 75,000 to 85,000 tonnes for April, May and June. South Korea’s stainless steel scrap demand was minimal in the second quarter because several furnaces underwent yearly maintenance, although these have been back online since June and therefore an improvement in scrap demand is anticipated as mills are holding decent order books for their finished goods.

There was an increase in Japan’s domestic consumption of stainless scrap in the second quarter of this year; indeed, the country’s exports remain low owing to this strong home demand. With higher container freight rates and vessel space issues, exports of scrap from Japan are likely to remain weak.

Logistics have been providing many operators with a major headache ever since the Red Sea crisis erupted in the final quarter of 2023. Serious, widespread problems are being created by a shortage of vessel space and by extremely high freight rates which have continued to rise week after week.

Indian stainless mills’ order books for finished goods remain weak. Furthermore, the gradual increase in nickel pig iron and ferro-nickel imports into India has eaten into a stainless scrap trade which had been bullish up until a year ago. Mills’ procurement of imported stainless scrap has been cautious rather than aggressive at a time when their inventories are not huge.

Increases in construction, automotive and infrastructure activity in the Middle East are said to be the major factors contributing to regional growth for stainless steel. Its recyclability and longevity are also driving this growth, it is argued, because these properties align with sustainability goals.

Continuing robust demand for superalloy scrap has been driven by the recovering aerospace industry, increased global defence spending and the oil/gas sector. Boeing’s decision to reacquire Spirit AeroSystems is aimed at addressing issues related to travelled work, impacting the materials industry by delaying new purchases for aircraft manufacturing. This is said to be filtering down to scrap, with diminished demand for some Airmelt grades.

As for the nickel market, a supply-demand imbalance is expected to keep the metal’s price subdued in the short term. Nornickel is forecasting a global nickel surplus of around 100,000 tonnes this year, with the surplus expected to remain around the same level in 2025. However, S&P Global Market Intelligence projects a deficit from 2028.

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With contributions from its members, BIR publishes periodical commodity reports under the label “BIR World Mirror”. These detailed reports exist for Non-Ferrous Metals, Ferrous, Stainless Steel / Alloys, Paper, Plastics and Latin America and provide BIR members with up-to-date information on the respective commodity or market segment.

The report on Non-Ferrous Metals appears once every two months, whereas Ferrous, Stainless Steel, Paper and Plastics are published quarterly. Latin America is covered twice per year.