NEW YORK Stainless steel scrap prices have fallen for the fourth consecutive week amid continued anemic demand from consumers and tumbling nickel prices.
"Its hard to find a mill buyer these days," one market source said, noting that all indications suggest the current weakness likely will continue.
"Forget the rest of the year," a processor source said, citing numerous fiscal and political issuesincluding the looming U.S. "fiscal cliff," the European debt crisis and a reported slowdown in Chinaas factors causing economic uncertainty and impacting demand for both stainless steel and scrap.
Pittsburgh-based Allegheny Technologies Inc. chairman, president and chief executive officer Richard Harshman confirmed during the companys third-quarter earnings call last week that stainless demand has pared back, noting at the time that lead times for commodity stainless sheet and plate are only about two weeks (amm.com, Oct. 25).
While scrap demand often softens during the final months of the year as consumers look to reduce inventories before year-end, the slowdown has been worse this year due to the added macro-economic woes, sources said.
"This is worse. It started earlier and its worse," the processor source said.
Processor buying prices for 304 clips and solids are now at a nearly 40-month low of between $1,435 and $1,500 per gross ton, down from $1,500 to $1,570 previously, while 316 clips and solids have fallen to between $2,105 and $2,175 per gross ton from $2,195 to $2,240.
The historically low prices are said to be stymying scrap flows, although some processors reportedly are still getting more material than they would like, considering mill demand levels.
"(Some processors) dropped their prices and kept buying so they dropped them again," a second market source said.
Hurricane Sandy reportedly has affected scrap flow on the East Coast, with a number of yards closing their doors early Monday in anticipation of the storm (amm.com, Oct. 29).
In addition to soft demand, falling nickel prices on the London Metal Exchange are adding to stainless scraps woes. The cash contract ended Mondays official session at $15,870 per tonne ($7.20 per pound), down 1.4 percent from $16,100 per tonne ($7.30 per pound) at the end of last week, but recovered somewhat Tuesday to $16,000 per tonne ($7.26 per pound).