Quarterly Report – April/May 2019

US stainless and carbon steel production has been on the upswing lately, which has been good news for domestic stainless scrap processors. According to figures from the International Stainless Steel Forum, US stainless steel melt shop production increased 2% in 2018 to more than 2.8 million tonnes.

That increase was reflected in corporate reporting. According to Outokumpu’s 2018 Annual Report, the company’s Americas division delivered 762,000 tonnes of stainless steel last year, up from 742,000 tonnes in 2017. So far in 2019, figures from the American Iron and Steel Institute indicate that total domestic steel industry capacity utilisation is running at 81.9%, up from 76.4% in the corresponding period last year. Markus Moll, managing director at SMR, told the US Institute of Scrap Recycling Industries’ recent Spotlight on Nickel and Stainless: “For those of you ... selling to domestic mills, it will be a good year. It’s one of the best-performing markets.”

But softening commodity prices and uncertainty on the trade front are clouding the outlook. On the LME, cash nickel prices were trading around US$ 13,600 per tonne in early March but have recently cooled to below US$ 12,300. Cobalt prices have been on an even wilder ride, starting the year at around US$ 45,000 per tonne and dipping below US$ 30,000 in March before edging up more recently to around US$ 34,000. In the first quarter of 2019, generally firmer raw material prices contributed to higher stainless steel and stainless scrap tags, but competition remains tight. According to Fastmarkets AMM, the lead time for standard 304/304L/316L stainless sheet at North American Stainless was only around four weeks as of early April, keeping a lid on base prices.

As with domestic production, overseas demand for stainless scrap made a positive start to the year. According to figures from the US Census Bureau, exports of stainless steel scrap increased 33% during this year’s January-February period to nearly 72,000 tonnes thanks to improved demand from Canada, Taiwan and India. But US stainless scrap shipments to China have practically come to a halt. The additional Chinese scrap import limitations set to come into effect on July 1 are a huge concern for US exporters, especially if it hampers their access to containers.

Doug Kramer - Doug Kramer (United States)

Doug Kramer

Spectrum Alloys LLC (USA)

United States
Quarterly Report – April/May 2019